HOT TOPIC: Credit Card Fees and Who’s Paying Them
Ah, the good ole days–back when roller sets and bleaching caps were the norm and the bouffant was the style du jour. Thankfully, times have changed—no crochet needles necessary for highlights anymore! The way clients pay has also changed. Instead of cash or check, most clients pay with either debit or credit and when they slide that card, they pass along a processing fee. One stylist asked: “I worked at a salon that charges stylists the credit card fees if clients charge their services and products. Is this legal? Right? Normal?”
Whose responsibility should it be to cover that fee—the salon owner or the stylist? Our BTC Members weighed in and here’s what they had to say:
1. Who’s making the money?
“If the salon owner is making the profit off product sale, not the stylist, then why should the stylist take a cash hit for making the owner money?” questions Robbie Satterlee.
2. Plan for it.
“It’s an operating cost. These are the things you consider in creating your business plan and budget for the salon,” believes Jennifer Burgess.
3. Everyone bears the cost or no one
“In this day and age, no client should be charged an extra fee to use a credit card. Raise your prices to cover the cost,” says Linda Taylor Bernal.
4. Don’t charge for convenience
“This is a tax deductible expense for a salon, and it is the cost of accepting credit cards for service. It behooves them to accept credit cards because clients spend on average 13% more when paying with a card. Charging for the convenience is how to lose clients,” warns Heather Amanda Davis.
5. Spare a Square.
“Have you heard of the Square?” wonders Ron Smothers. “It works wonders. They charge 2.7% and I barely notice it. It’s great for booth renters like me.”
6. Not so fast!
“As a shop owner, I will charge the stylists the charge. Why should I eat the fees so they can have their money free and clear? What am I getting out of it?” asks Tony Badalamenti.
7. To each, their own.
“The credit card machine I used deposited the money directly into my stylists’ accounts. Each stylist had their own contract with the processing company and they were charged a fee by the processing company for each transaction,” suggests Billy Kornacki. “If they didn’t want to use my machine, they were free to use whatever they wanted.”
8. It comes with the territory.
“No one is making you own a business. You choose to. No one likes paying fees, taxes, insurances, supply costs, etc. that it takes to own and operate a salon. But that’s what it takes if that’s the route you choose to go,” argues Sarah Perhach.
It is important to check with your state’s Labor and Industry Board for questions related to laws or regulations about credit cards and processing fees.