The beauty industry is a powerhouse in the economy, a constantly changing arena with hip new trends popping up with every blog, YouTube tutorial, and celebrity makeup line. Salons are quick to adapt while maintaining high standards of service. But one thing has not been involved in the changing landscape of the industry: tipping.
As fast paced as the industry is—it’s a whopping $52 billion—the way customers tip stylists remains antiquated. Salons often don’t accept credit card tips, customers almost never carry cash, and when stores do accept credit card tips, they’re now tasked with doubling as a bank to dole out those tips. And worst case, the salon professional now has to wait two weeks to receive their tips in their bi-weekly paycheck.
The optimization of tipping has been ignored, even though it can account for one-third of a stylist’s income. And of the cash stylists do bring home, there is no paper trail of income to report, or to present to financial institutions (for a potential mortgage, car loan, etc.). It leads to a frustrating revolving door for stylists, rather than a means to climb the ladder of success.
Having grown up with a mother working in hair salons, I witnessed all of these struggles and woes. So, we decided to come up with Tippy, an app that allows customers, at the end of their appointment, to leave a tip through our small stand-alone iPad kiosk. And our forward-facing platform suggests tip amounts for the customer—for their stylist and any other employees they interacted with. While we may no longer hand over cash directly to our stylist after they spent hours perming, trimming, and coloring our hair, Tippy is a digital version of this experience.
You’d also be surprised by the fears that customers have when they are allowed to tip on the traditional receipt at the front desk. Many believe some of the tip is kept by the owner, and most believe their service provider is unaware of the amount of the tip. Now, the tip goes directly to the stylist and into their “piggy bank,” stylists have concrete numbers to show financial institutions and, when April comes around, stylists are now compliant with the IRS.
Stylists and salons that use the app have told us they’ve noticed that customers are also leaving higher tips due to the personalization of the process and the suggested amounts. With Tippy in place, participating service providers are getting more respect and feel more empowered with their financial decisions.
We’re finding that stylists are creating separate savings accounts for their tips, treating them as business accounts. With the support to grow their financial aspirations, clients are paying off their cars early, taking their families on trips, and setting financial goals for themselves. And let’s not forget paying off their beauty school loans. In a profession that requires a license to practice, cosmetology school can cost as much as $20,000. Stylists are already in the hole before they’ve walked through the salon on their first day of work.
Not only is being financially empowered beneficial for the stylist, the good fortune spreads to the salon as a whole. Morale is higher, sales are up, and clients are happy!
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