Why We Still Rely on Tipping
This is something I think about almost every time I run payroll. Or when I see a social media post asking, “How much should I tip?” Or when I’m trying to build a system that feels fair to the people I work with and honest to our clients.
Here’s the truth: I wish we didn’t rely on tipping.
I wish I could build a pricing structure where what you see is what you pay, and where my team is compensated clearly, consistently, and without that extra step at the end of every service. But the deeper I get into the numbers, the more I understand why so many businesses still do.
THE 20% THAT ISN’T ON THE MENU
In theory, tips are a bonus or a thank-you for great service, given at the client’s discretion. In reality, they function more like a structural part of compensation. Let’s take a simple example. A service is listed at $67. A typical tip is 20%, which is around $13. So the client is already paying $80 pretty much every time. Many generous clients tip above the standard 20%, increasing the tech’s wages directly. The total cost of the service already exists. The question is just how visible we’re willing to make it. If I raise that service to $80 and remove tipping, nothing has actually changed financially for the client. But it feels different. $67 feels reasonable. $80 feels expensive, even though the total is exactly the same. This mindset shapes pricing in this industry.
THE HIDDEN LAYER UNDERNEATH IT
There’s a less talked-about part of tipping that makes this even more complicated. Cash tips operate differently than card payments. They don’t run through processing systems, so they avoid credit card fees. So when we talk about eliminating tipping and rolling that income into wages, we’re not just changing a line on a price menu. We’re increasing payroll taxes. We’re increasing processing costs. Transparency, as much as I value it, comes with a higher operational price tag.
THE “SOLUTIONS” THAT DON’T ALWAYS FEEL BETTER
Some businesses solve this by adding service charges or passing credit card fees directly to clients. From a business perspective, I understand the logic, and those costs are real. But from the client’s side, it often just feels like another fee layered on top of a price that was already unclear. So now you have a base price that doesn’t reflect the full cost, an expected tip on top of that, and sometimes additional fees just to process the payment. And on top of all this, that money isn’t going to the technician or business. It goes directly to merchant services.
WHAT IT WOULD ACTUALLY TAKE TO GO TIP-FREE
After thinking through all of this, I keep coming back to the same question: if we wanted to eliminate tipping, what would it actually take? Not in theory. In a real salon, with real clients, real payroll, and real expectations. It would mean raising prices. There’s no way around it. If a service is $67 and clients average a 20% tip, the real price is $80. To go tip-free, $80 has to be the posted price. It would require re-educating every client. Right now, clients are used to seeing a lower number and deciding the final amount at checkout. Going tip-free flips that entirely. It asks them to accept a higher upfront price and trust that compensation is already built in. That’s not just a pricing change. It’s a cultural shift in how the service is perceived and valued.
It would mean rebuilding compensation from the ground up. You can’t remove tips and leave everything else the same. Commission percentages, hourly guarantees, bonus structures would need to be rethought. Tips currently act as a buffer, an incentive, and a variable layer of income. It would increase operational costs. When all income moves into wages, payroll taxes increase. Processing costs increase. Costs that previously existed outside the formal system become part of it. These extra costs will be burdensome on an industry already operating on tight margins.
WHERE WE STAND
At Lark & Sparrow, our commitment hasn’t changed: we price intentionally, we pay our team as much of that revenue as we sustainably can, and we try to be as honest as possible about where the money goes. Tips are part of that picture right now. They’re a real and meaningful part of what our technicians take home. That’s why we encourage them, why we make space for them in the checkout process, and why we talk about them directly rather than pretending they don’t exist. The total cost of the service already exists. We’re just trying to make sure as much of it as possible lands where it belongs: with the people doing the work.