Why I Eliminated Tipping: The Impact that it Had and What To Consider

Hello, my friend. Welcome back to the Modern Hairstylist Podcast. I am honestly kinda nervous about today's episode. It's a really controversial topic, and I, uh, just wanna say upfront, I don't believe that somebody should or should not do this.

I'm really just gonna be speaking from my own experience, telling you why I did it, and then, you know, sharing with you i- w- what I would take in to consideration if I were you and I was contemplating whether I would do this or not, okay? And then also sharing with you some strategy that goes behind it if you do decide to roll it out. And then just pro- probably mostly, as I normally do, just go off script and just tell you the T about how I feel. But, m- I wanna be clear that I do not believe that my experience and my opinions here are the end-all, be-all.

I genuinely think that this is a case-by-case situation, and it's still such an up-in-the-air topic in the industry. And so, you know, you do with this episode and this information what you will, all right? Um, but so many people ask me about it, and so many people ask about it just in general and are thinking about it, so I was like, "Let me just address this damn issue once and for all on the damn podcast." So, today, we're gonna be talking about eliminating tipping, going gratuity-free as a beauty professional.

Let's get into it. Let's go. What's the tea, friend? My name's Hunter Donia, industry business educator for hairstylists, but my friends just call me Hunty.

Whether it be growing your clientele, making more money, or automating and streamlining your systems, in the next 20 minutes or so, you'll be hearing realistic, actionable strategies to create a beautiful career for yourself behind the chair. So, if you're ready to get into it, welcome to the Modern Hairstylist Podcast. Okay, going gratuity-free. It's kind of crazy, um, if you think about how intense this is for so many people, because we have been tipped in the United States for a very, very, very long time, and that has been a part of our income, a large part of our income, um, more than I think that we actually even have the chance to realize because we all too often don't claim it.

So, we oft- all too often don't get to see it on a P&L, um, which you absolutely should. You legally should claim your tips, and, eh, the thought of removing it means there's a lot of changes that would have to come into play and a lot of communication, um, that would have to come into play to make it so you do it in a way that makes sense. And I, again, like I said at the beginning, I don't believe that this is like a, "Yes, you should absolutely do this," or, "No, you shouldn't do this." This is truly going to be up to you.

But I'm just gonna share with you, I'm gonna start by sharing with you why I removed it, okay? So, I get microneedling done. Ashley listens to this podcast, my amazing esthetician in, uh, Reading, Pennsylvania, so, so much love. Shout-out to you.

And I hope that you don't take this the wrong way at all. So, I get microneedling done on my face 'cause I have really bad acne scarring, and when I am paying for a service, you know, that is, I think, $450, right? And I go down to checkout, to the cashier, to the register, to the receptionist, whatever you wanna call them, and they flip around the screen, and they ask me to tip on top of the $450 that I've just paid. And the 20% suggestion is a, it seems like, a whole other price for a whole other service.

That's just a little crazy to me. It just stings a little bit as a client, and that is just my personal experience. And I know that this conversation comes about a lot in extensions as well, too, because they're such a high-ticket service. And again, this is gonna be up to you and how you feel.

For me, as a consumer, as a client, when I am tipping 20% on a service that is over $250 to even $300, or if the tip is asking me to pay more than $50, that's just when I get a little bit uncomfortable. I get a little bit of a sting. It's like, dude, I am totally willing to pay this base price, and it's a luxury price. Like, this is expensive.

Like, especially compared to what I do, what we do as industry professionals. We were talking about this in a, um, in a group coaching call one time. We were just kind of chatting, and we were talking about how insane it is that somebody who is, like, doing a, um, med spa service will take 30 minutes to get something done and charge, like, quadruple what we would be charging for s- uh, somebody who would be getting a three-and-a-half-hour service done with us. Like, that is just wild to me.

So, anyways, I'm going off track. My ADHD is taking over. It's just, if I'm paying all of that money already, a 20% gratuity on top of that is a lot of money. It's almost like I could purchase a whole other service or multiple retail products, luxury retail products, with that same money that I'm tipping with, right?

And so, I was thinking about this in my own business, and I definitely was getting to my high-ticket point, you know, charging way more than everybody else in my area and charging a whole lot for my services. And it got to a point where the average person would be tipping more than $50 on all of my services, and I just found it to be a little ridiculous, you know? I have no problem taking money. Like, let me be real straight up with this, uh, so that way we, we don't think that this is, like, a mindset issue, okay?

Give me all the money. I will charge what I should be getting paid for the service that I'm rendering, period. I love sales. I love business.

I have gotten really comfortable with taking money. Trust and believe. But I still want to take money only if I believe I deserve it, and I believe that if somebody is willing to pay this high-ticket price for me...... then that's all I'm looking for and that's all I need to live my life, because I never, ever base my income and plan my budget based upon the tips that I get in my business.

They should not be something that you are relying on in your life, because that's a really unstable type of life to live because it's so unpredictable, and I'm a really big fan of predictability in stylist businesses, including my own. So, I ended up removing gratuity, and I needed a price increase regardless. So, when I removed gratuity, I raised my prices a fair bit, okay? I raised my prices more than just what I would be losing from the gratuity.

I deserved it. I was extremely booked out with a lot of new client requests a week. I absolutely deserved the big price increase. I kind of needed it anyway, so I was like, "What a perfect time for me to remove tipping from my business."

And what happened was, number one, my clients felt super excited and loyal to me after that happened because I explained to them how simple and easy it would be to come get services with me now, and they could expect what they'd be paying, and there's no guessing or math that they have to do. Like, literally, I would tell them, like, "I decided to remove this because watching you do the math on your phone and your calculator, um, while you're checking out with me, is quite honestly, it's- it's painful and it's just a waste of time. And it's like, I don't want you to have to worry about all of that stuff. I don't want you to have to guess whether or not this is the right amount or not, and quite honestly, I'm getting to a price point where this tip on top of this just doesn't make sense for me.

So, I appreciate you just paying the prices that I have. I'm completely profitable based upon the prices that I'm charging already. So, as long as you're paying this, I'm totally cool, and if you are so obliged to spend that extra money, I would rather you purchase retail that you can take home and make your hair look fabulous in between the appointments, and that'll get me more referrals and you'll feel beautiful about your hair, um, and everything." Everybody wins at the end of the day, you know?

I have a more predictable income. There's not people who are tipping me under 20% anymore. It's everybody is evened out and everybody's paying the same damn price, and I know exactly how much I'm gonna make as long as I am booked. It is really, it has been a really beautiful transition for me.

I- I've- I've very much enjoyed it, and my clients really enjoy it as well, too. And I'm not losing any money because I adjusted my prices to make up for the fact that I would possibly be losing that, right? So, considering this, considering this, right? If you're somebody who really relies on your tip money to make ends meet and you're budgeting your tip money in right now, then going gratuity-free and then adjusting your prices to make up for that, I would suggest just being cautious if you're in a space where you're yearning for new clients and where you're not booked to the space and place that you want to be booked and you're not getting the new client requests that you're getting.

Because at the end of the day, when somebody goes onto that service menu and they see a cheaper price versus a larger price, if it's not extremely clear that gratuity is included in the price, then it can detract people from actually booking an appointment with you because the price seems like less on the front end, right? So, if I was somebody who was charging, not charging luxury price services, which, by the way, you really should not be charging high-ticket anyway unless you have the book to be able to handle that demand. So, if you're in this space and your gratuity is above $50 for your base prices, then, I mean, I feel like you should probably be s- you- you can consider this safely. But if it's anything less than that, honestly, I would keep tipping in your business, and that's just me.

That's just me. That's just my opinion. I would keep tipping in your business if your gratuity wasn't ridiculous. If it is ridiculous, t- to me, my opinion is $50 on top of a- a service that I'm already paying a lot of money for is kind of ridiculous.

$50 plus, right? That's kind of, like, my minimum. If you're like me, then I'm saying once you get to that point, I feel like it might make sense for you. If not, I don't think it makes sense.

I don't think there- there's many reasons for you to do it, and I wanna also address, too, the conversations of the racist history behind tipping and, you know, not pretend that that doesn't exist. However, here's what I will also share, and this is what I took into my consideration- my consideration when I made this decision, because a- a massive core value of mine is diversity, equity, inclusion, and belonging, plus anti-racism, intentional anti-racism. I took this very strongly into my consideration whether I wanted to k- keep tips or not, and what I will say is that I have two very close friends of mine who are Black women who teach specifically DEIB within the beauty space, and I have never heard either of them share that tipping is something that should be eliminated, ever. And I don't know about y'all, but as somebody, as a- a- an ally, which I'm hoping to be an ally, right?

Always working on being an ally, always putting in that work, I'm not interested in what other white people have to tell me about what I need to do to be anti-racist. I'm focused on paying Black women to share with me what they believe I need to be doing to create a more inclusive business and to participate in anti-racism work, right? So, I've actually even... One of those friends even shared that removing tipping is not gonna make you a more inclusive business.

So, if you're worried or if that's a part of your decision, that's my experience, okay? And you do with that what you will. I always say whenever you're making decisions out of the intention or with the intention of being more inclusive or not participating in white supremacy or whatever it may be...You wanna make sure that you're listening to an expert, and that the, uh, trusted expert is the one who is sharing that advice with you, and that you're not just listening to another white person just sh- like, m- using, possibly – and this is gonna be really controversial – but using that rhetoric as a way to push their narrative.

Ooh. And this is not to put down anybody who is, uh, ta- who wants to just do better and who wants better for the world and, and all that stuff, but it is something that I know is a concern. And I, and I don't wanna pretend that it's not, and I wanted to address my experience with it here and now, okay? So my tea is if, i- if you are somebody who wants to remove it because you feel like it makes sense, because you feel like your clients are already paying so much, and, you know, you don't rely on tips for your income, and you are comfortable possibly adjusting your prices to make up for the fact that you're going to remove gratuity, and if you think it may- would make things more simple and it would be good for you, go ahead and maybe do it.

Like, I don't think there's any problem with doing it at all. You're the CEO. You're the business owner. You can do whatever the hell you want.

If that doesn't feel comfortable for you, then don't freaking do it. Um, or if you're not in a space and place after sharing what I've shared where you feel as if you are in a stable space to be able to remove gratuity, then don't do it, right? Um, keep i- keep gratuity in. If you are in a space where you wanna take tips for the rest of your life, take the freaking tips.

It really does not matter that much. As long as you are looking at your income from a high level view consistently, very much checking in on your numbers, which a lot of us don't do often, as long as you are operating legally, above board, right, then do whatever the fuck you want. Oh my God. Do whatever you want as long as it is aligned with your core values and as long as it makes sense for your business and you're not going to F up your business by doing it, do whatever the hell you want, okay?

So that's my hot take. That's my tea on eliminating tips. I hope that this was helpful for you. I hope that my own experience and my journey throughout this was some sort of helpful for you if you're considering this.

And I'll see you on the next episode of the Modern Hairstylist podcast. Peace out, girl scout. Bye bye.

End of transcript. © 2023 Hunter Donia LLC.