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Haircut tipping quandry

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Megan Watts

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Haircut tipping quandry

by Megan Watts » Fri Jan 25, 2013 5:39 pm

So I just wanted to throw this out there to see what you all thought of this situation. My current salon stopped letting people tip on their credit cards. So this means I can either tip with cash (which I so rarely carry) or write a check to my stylist of the tip. However, I can not pay at this salon for services received with a check. So either way I would have to pay with 2 forms of payment. And if I did have cash, it would likely be $20 from the ATM and I really dont want to have to ask my stylist for change to pay her. I wrote a letter to the salon owner expressing how this policy change meant that likely I would go to another salon that made paying more convenient and I regretted to do so. Today I got a response back from her..and it feels a little like she's passing the buck on this one. I can't see restaurants doing the same thing.
Here's her response...
"I am very sorry for the change. Businesses received notices at the beginning of April 2012 the IRS put into law all funds put through your credit card terminal will be reported to the IRS. If I continued with this, I would be responsible for matching employee taxes (FICA/MEDICARE) on their personal tips. I am a small business owner, and I cannot and do not want to pay taxes on my employee tips. This is part of the OBAMA Care shortage. FICA and Medicare just went up. I also lost my discount on unemployment, because of Kentucky's shortage in their unemployment fund. I really which things were better. I am extremely sorry for the inconvience. I have tried to find an answer to this, and I am still researching. I am sure ****** would rather keep you as a client with no tip, than for you to go somewhere else."

I would never go and not tip someone. I'm sure she wouldn't appreciate that either.
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Robin Garr

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Re: Haircut tipping quandry

by Robin Garr » Fri Jan 25, 2013 6:09 pm

Megan, I don't like this, and I suspect that this "blame Obamacare" meme is being spread by lying liars for political reasons. But a lot of small business people buy it, so we're going to have to live with it.

I guess if I were in your shoes and I liked the hairdresser, I would just make it a point to have cash when I went in to see her, even though I normally don't. If I liked her and didn't want to do wrong by her, I would just consider it a small cost of doing something good.

On the other hand, if I wasn't that attached to her, I'd probably just go somewhere else. :mrgreen:
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Doug Davis

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Re: Haircut tipping quandry

by Doug Davis » Sat Jan 26, 2013 1:30 am

As a business owner let me respond....she is responsible for paying the matching taxes on ALL wages (which includes tips)earned as required by law if the total amount is in excess of $20 per month. She should have been paying these from the get go. So it sounds like she was guilty of tax evasion.

It is common in salons for salon owners to try and misclassify their stylists as "independent contractors" also to try and avoid paying taxes for them. The IRS has gotten smart to this and in 2012 a law was passed making it possible for them to finally catch them in the act. As of 2012 the IRS changed the reporting requirements for credit card processors, which now will alert them if a salon owner is attempting to do this.

So just like in Lynn Winter's case it has nothing to do with the Affordable Care Act and everything to do with allegedly breaking the law.
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