SMME EP 411: Save Thousands on Your Spa’s Credit Card Processing Fees with Tippy

7:55AM Apr 21, 2025

Speakers:

Keywords:

Tippie

credit card processing fees

spa owners

tipping industry

savings

staff retention

client satisfaction

convenience fee

payroll taxes

financial advisor

business growth

free trial

instant access

service providers

marketing strategy.

Welcome to Spa Marketing Made Easy, a podcast for spa owners who want to step up their leadership and business skills and step into the role as spa CEO. I'm your host. Daniela Woerner, CEO of Addo Aesthetics and Founder of the Growth Factor Framework Program, where we teach, coach and guide spa owners in scaling their spas to the next level of growth and unlocking freedom in their life and their business. I'm so glad you're here now. Let's dive into the show. Hello, my dears. Daniela here, and I'm just gonna start this episode with a huge thank you to Tippy. So we invited them on the podcast after so many of our growth factor students were just raving about their offering, and Marcy brought so much value, and they showed up in such a huge way for our community. In fact, they are offering every single one of you in this incredible community one year, totally free with their service. And if you're not sure what tippy is, you may not have any idea why that is such a big deal, but this offering has the potential to save you 1000s of dollars in credit card processing fees for tips. So anyway, listen to the episode, and when you're done, be sure to click on the link in our show notes, so you can try tippy for one year, free, literally, no strings attached, no credit card, no risk on your part. This is a great way to save some money. Listen to the episode, see what they're about, and just huge shout out and thank you to tippy for supporting the Addo community. All right, Marcy, I'm so excited to have you here on the spa marketing Made Easy podcast. It's gonna be like a I don't even know what like when you find $20 in your purse and you're like, oh my gosh, I didn't know I had that. And you're just feel like you're winning at life. I feel like this is gonna be one of those episodes where people are like, Oh my gosh, I was just able to find so much money that I had no idea that I could even save in my business. So with that kind of preface, why don't you? You know, I talked a little bit about you in the intro, but tell me what it is that you do at Tippy? Yeah,

absolutely. So I'm the sales manager at Tippy. I have been with Tippy, you know, from very early on. So I truly just know tippy. Love tippy, passionate about the industry, so I handle a lot of the sales side of things. I also work a little bit in the marketing side. Marketing side of things, and I work closely with with a lot of different areas within our team here at Tippy.

So what is tippy? Why are we so excited about this? Tippy

is it's just amazing. It's this, like you said, this thing that people don't even know sometimes that they're missing out on, right? It's this magical tool that is great. It's, it's, it's, there's literally not a business that it's not a good fit for. It is a way for businesses to have credit card tipping, but to still save money, because they can help save on the credit card processing with tips. There's huge benefits to their staff. Because what Tippy does, and we really call it like a win, win, win. Because, like I mentioned, the owners can save money with Tippy, the staff members, we see higher tips. And of course, everybody loves more money. And when, when your staff is happy, they're, you know, more likely to stay with you. And so then we also have some recruiting and retention pieces that that tippy helps with. And we've also discovered, even though it was really built originally for salon owners and service providers, clients actually love tippy too. It really was amazing to learn how when we migrated from cash to credit cards and plastic, and how much of that personalization of tipping was lost, and how much of that you we didn't even realize that people missed out on, you know, you know, as as people transitioned and they were writing their tips on like a credit card slip or just pressing a button, people started to wonder, you know, does my service provider even know that I'm leaving her a tip. You know, first of all, does she get the whole thing? Or does this go to some bucket where it gets split? It just, there were so many unknowns on that side that we didn't even realize until we really started to get into, you know, dig deeper into the tipping industry. So it, you know, it's, it's a terminal that just gets added into a service, into part of your checkout process, that your business, and it's seamless, it's easy, it's it just makes sense, but it provides a ton of benefits. So

I started hearing about Tippy probably around a year ago. A lot of our growth factor students, it's kind of. Of, you know, one person talks about something, and they try it, and they're sharing their experience, and then it kind of cascades, and then we end up on these group calls, having conversations of how it's working, and showing the setup and all of these things. And I think it's really important, especially now, this has been a rough year for all industries. You know, business wise, it's an election year, there's recession fears, all of these things. And in times, it really should be in all times, but I feel like in times of constriction, when people are really focused on, like, wow, how am I going to get my revenue? They're really looking at, what payments can I bundle? What you know, like, Where can I save? How can I save? From both ends, not only like trying to bring in more revenue, but trying to cut expenses. And one of the big expenses that we see are credit card processing fees. And when you it's not a big deal for the patient, because it's, you know, cents. It's usually less than $1 that they're paying. And I know for me, like it's so convenient to be able to pay on I have left hair stylist because the salon would not take credit cards, and I don't carry cash. And so it was an inconvenience for me to either not feel like, you know, like I don't want to not tip my stylist, you know, and but then I'm like, now I have to go figure, I have to go to the ATM, I have to get cash, and I'm paying the ATM fees. And it's this whole thing that if I forget to do that, you know? So I will gladly pay 50 cents on a credit card processing fee to save me that amount of time. I'm going to pay three bucks on an ATM fee anyways, right? So it allows there's the convenience factor of that, there's the benefit that the tip is going directly, you guys have. We'll have to include a picture of the platform when we do this episode, so we'll include that over on the show notes page on our website. But essentially, you have your point of sale, and then is it a little iPad, like a mini iPad, or so? Yeah,

so we call it the kiosk, but it's essentially just an iPad in a little stand that sits right at your front desk, at your your checkout area. So you've

got a picture of the provider. You can click on that you can add the amount. And what we've seen with spas, the way that they're doing the checkout is they're saying, all right, I'll go ahead and do your service on the card that we have on file, and I'll turn this around here. If you'd like to leave a gratuity, you can do that right there. And so it really becomes this whole seamless process. Now, for these spas that are seeing you know hundreds of patients or in clients every single month, it can save 2030, $40,000 a year in credit card processing fees.

It's significant. It can be very significant. It's and it's amazing too, because even though people know their numbers, they know their business. Obviously, you know, that's part of, you know, running a business is understanding all your finances, but when people truly start to break down what they're paying for those credit card just, just on the tips alone, it's right, or even mind blown, you know, it's like, wow, what? That's crazy. And to then just be able to save that by implementing something so simple, it just makes sense. It just really makes sense to do.

Now, I know that you guys cannot give financial advice any of that type of stuff. I want to preface that, but there are also accounts that they are moving this away from their payroll taxes as well. They still are required to pay payroll taxes, but they're putting that on the employee correct? So how is this all working? Because this is something that where it comes up a lot, and it may be state by state that a CPA needs to answer, but what is the payroll tax situation that happens with gratuities as well?

Yeah, yeah. Great, great topic. So, and you're absolutely right. My whole background is all in beauty and sales, so the last thing people want me doing is giving them tax advice. But I can tell you that what we do is we make that part of the process really easy, you know, unfortunately, everybody's got to pay taxes, and that is just, you know, it's part of doing business. You pay taxes. So what we do with our system is we just make that easier by providing that information, and it's very easily accessible at two different points. So as a. User or service provider, the person receiving the tips. I can go right into my tippy app. I can check out my tip history. I can actually see where those tips came from, which is another cool feature, but so I can see all my tip history. I can export it with a click of a button. I can do it by certain dates. I can customize however I want to pull that report. It will download to a basic CSV file, and I have all that information right there at my fingertips. Same thing from the business side, that business also has access to all of those, all of the tip information, through their company. So they can pull company wide reports. They can pull reports that break down every individual. So we just make all that information easily accessible, and then we just advise people check in with your CPA, check in with the person that does your taxes, they'll advise you the best way to include that into payroll, to wrap that up, just to figure out what the best practice is going to be for your business and in reporting those tips and how to do it.

Because I know, I know, there's industries like the restaurant industry, right. There's a long history of people getting cash tips. And typically, you know, they get the tips, and then it is the waiter, waitress responsibility to report those on their taxable income, is what I always understood. And so in spas, you know, when we're trying to keep our payroll percentage down. If you're paying the tips out through payroll, you are also additionally paying extra on those on the tips that are essentially not, you know, it's supposed to be like a bonus thing, yeah?

So they do, yeah, you're absolutely right. So when, then, when you include them in your payroll like that, then you get it is taxed on both sides. So it's, it's, you know, it's looked at as, as as part of the income, right? So whether it's cash, you know, check, if anybody still writes checks, any of those things, whenever they get reported, you know, into your system, then everything is included for tax purposes. So then everything is recorded and taxed on both the employee side and the business side.

So I think it's as a business owner, a really important topic to sit down with your CPA, your financial advisor, someone that understands the laws in your state. What you know some states will have, like, a minimum required amount, like they're just all different states. Are all different requirements in the different states. So sit with your CPA, make sure that you're bringing this to their attention and saying, What is the process that I can make sure I'm not breaking any rules, right? We don't want the IRS, you know, coming after us for anything you that is not your money. You got to be able to pay your taxes, to be able to operate your business, all of that. But is there a way legally that we are able to, you know, provide the reports, educate our staff, etc, to make sure you know, similar to how other industries are doing it. It's a it is an interesting conversation, I think, to make sure that you have with your CPA.

Yes, exactly. And you know, to be fair, there are so many people that are just confused on the topic, and that's what your CPA is there for. Talk to them and let them bring clarity to that, because it is, it's confusing. You know, people feel sometimes like they're not sure, you know, am I doing it right? Am I not doing it right? And they live in this kind of constant state of, like, almost anxiety, like, I don't know, and they can, and that is their job, and they will provide the most correct and accurate information to make sure that people are reporting properly and that they're they're safe, and

what we as business owners need to communicate to our staff right to be able, yeah, because there's, you know, our industry has a long history of tipping as a normal part, and you know, we're seeing that's another thing in the past couple of years this like, what are they calling it, tip creep?

There's all kinds of names, yes, yeah. I think everywhere you go, it's everywhere you turn now. And it's so unfortunate to our industries where tipping has always been such a significant, vital part of

of the income, of the compensation. Yeah.

And then, and then you've got these other things where you've never in your life been asked if you wanted to tip on and now all of a sudden, everybody's questioning like, 20%

for takeout when you pick up that I'm like, really, really. And even I was in a taxi the other day and they wanted to meet it. It was like, 2530 or 35% were my options. You know how it's usually like, 1520, 25 No, they moved it up for the taxi. I was like, Oh my gosh, everywhere you

it really is now it is, you know, and being, being a company that considers ourselves experts in tipping. You know, it is hard because we. Yeah, you know, we stand behind, you know, the purpose of our product is to benefit these companies where we are traditional tipping businesses, you know. And you know, so it is where there's a

service, you know, there's a service. Yes, exactly,

yeah. I know it's even, you know, I watched somebody literally just like, tap my coffee, you know, just out of a and same thing. And they're like, you want a tip larger than my coffee? Like, I don't. It doesn't make sense, you know? Yeah. So it is. It is a tough, tough time in tipping, where there's a lot of, I think, confusion and and then people get this almost guilt, because you're like, I don't. Am I supposed to? Am I expected to tip on this? I don't. I've never tipped on this before, but now I'm getting this option. So I think the thing that really helps with our side of things is, is it also kind of legitimizes, like our part of, you know, the tipping, because it's, you know, you don't always know the person bringing your takeout food up to the counter, you know, but that person you're coming to regularly, or you're seeing for important things that make you feel good. It's a totally different scenario. And so for that, I think that's one area where people don't question, you know, I want to leave a tip. I want to show my appreciation for a job well done and for helping me and making me feel good.

So talk to me about how your fee structure works. Like, if someone is interested in bringing Tippie into their practice, do you guys the equipment? I think you guys have an annual fee that you're paying. What kind of support do they get? Like, what is the whole process around this?

So, and I just had to preface this by saying, people always, when I go through this portion of it, they're like, Okay, what are you hiding? Because it really we have done everything we can to make it as simple as possible for people to bring this in and make sure it's a good fit for them. You know, we're not, you know, trying to, you know, force people into anything. And we don't want you stuck with something if you don't feel like it's a good fit. So how our pricing works is we do have an annual subscription fee. It's $400 a year per kiosk. So that includes your equipment. So we send you that iPad, in, the stand, the cords, everything that you need to run our system we provide for you, and that's all then included on your ongoing subscription. So, you know, technology is great, and over time, it starts to not be as great. So you know, all that's included, we swap out your equipment as needed, if we upgrade equipment, that kind of thing that's all included in that. So the hardware, software and support is all included in that annual subscription, and that is the only ongoing cost to the business. So the banner, the business pays no transactional costs for those, for all those tips that run through, they're just paying that subscription fee. So it's pretty

it's pretty easy to calculate, like, if this is going to be an ROI or not. I mean, you just have to look at what did I pay in credit card processing fees, and if it's less than 400 then you're winning, right? Absolutely,

absolutely, and, and so there's also a, typically, a so we charge just a shipping fee and when they first get started, and then in situations like this. So you know, because you've been so gracious and invited me on your podcast, so anybody that hears this would also get their first year totally free, with no there. We don't have a contract. So what that means is they can literally bring this in, say, you know, why not? There's literally no risk involved. I'm going to bring it in. I'm going to run it side by side in my system, you know, see how it goes in my business. If at any point they're like, You know what? I'm not seeing it. I just don't, you know, I don't, I don't get it. I don't get what's so great about it. No problem. We send your shipping label, you send it back. And then after that first year, you've literally paid nothing. And then you can really sit down and look at that number and see, okay, I've saved significantly, not only, you know, from this first year free, but also in my credit card processing fees. And then it's, again, a no brainer to just continue on with the service so

they literally can try it for free for a whole year, absolutely

no money down like nothing. Then no hidden costs, nothing at all. We just send it out to you, totally, totally free. And like I said, there's no there's no strings attached. There's no you have to process for six months. Nothing like that. It's, it's bringing in see if it's a good fit for your business. You know, we want to, we want you to be able to try that and not feel that pressure, and then, you know, we'll go from there.

That is such a no brainer for everybody in the spa industry right now. I mean, it's, this is an opportunity to you're essentially like you will make the money to even pay the $400 for the next year. So I highly, highly encourage those of you that have practices, that have spas, regardless of the amount of revenue that you're doing, whether you because you know what, you can grow really fast. So even if you're a solo. For taking tips you want to be able to do it on the credit card, even if it's just you, that is a great opportunity. And if you have a practice with five or six providers, now you had mentioned $400 for each terminal. Is there a limit? Because we have spas that have 1520 providers. Is there? How does that

work? Unlimited amount of people on a kiosk? So we have businesses with upwards of 50 people on one one terminal. So you can, there's, you could, you don't have to have a certain amount of people per terminal.

It's more of like the the checkout desk. If you have multiple checkout desks you want to be able to have,

yes, yeah, okay. You know, some businesses have multiple areas where people can check out. You know, if they've got multiple floors or different so that's just so that, you know they're they can have one at every area where they would need one.

Okay. Well, I think you're going to get a lot of business that is like free money, free money, which I think people really is a welcome thing in that in the industry, especially after the year that we've had in 2024 with just the challenges, and so it's really like every little bit helps, for sure. So what else do we need to know about tip? So I

should probably explain how we save on the processing fees. So I know you had kind of mentioned it earlier. What we do is we pass along a convenience fee to the person leaving the tip. So rather than the business taking that fee on it's passed along as as a convenience fee. And it's minimal, and it's so funny, because, like you mentioned, it's it's for the convenience, right? So it once they know that it's going right to their service provider, that they're going to know that it came from them. Clients don't even bat an eye at that minimal fee, it doesn't even phase them, to be honest.

Yeah, it's, it really is a convenience piece that makes such a difference for the provide, or excuse me, for the patient or the client, to be able to have the convenience to put that on their credit card, to know that it goes directly. And something that I really like about tippy is, there's the provider's face is right there, so you can see them. You can know, okay, this is going directly to that person. They know it's coming from me, because there is that, like, like, I remember I didn't want to. I'm like, Oh, my stylist is going to think I didn't leave her a tip, or didn't and it's like, this guilt happens. I'm like, I'm in the spa industry. I'm not going to not leave a tip, you know. Okay, so how do people take advantage of that offer? There a special link, a special code, like, how are we going to do this so we can make sure that we've got it all linked up properly under the show, yes, so

I'll share a special link that will just send them to a page where they just put in some of their basic information, so that we can reach out to them and that will lock them in for that deal. The other thing that I should probably mention too, aside from from higher tips for service professionals, anybody receiving a tip through our system, they actually get their tips instantly as well. So there's the other part of the benefit is, is people have instant access to these, these funds as well, which is a nice, just a nice perk to have, but so it is really great. And you know, all around it's, it's kind of covered every base where, you know, all these different areas of tipping that people have concerns about, you know, I you know, is it going to benefit my staff? You know, like, there are businesses who are like, Okay, I'm just getting rid of tipping Well, you know, then that hurts your staff member. And a

lot of people just included into the the price, you know, and I've seen that because there has been this, like tipping fatigue among the the patient base, but we are an industry that that's normal, you know, it's it's normal where we are acceptance of that. You know from we're service based industry, and we're not seeing restaurants be like, no tips, you know, it's, it's just these other types of businesses that you're like, why are there tips now on here? But for us, I think that, you know, in certain business models, sure, it can work, but I don't think that we need to go to a no tipping model, because that is a significant amount of revenue for our providers.

It is, it is, and it really does impact them so much and and, you know, we've even heard from businesses. You know, I get the pleasure of talking to a lot of different businesses across the US. And, you know, we've heard from business. This is where they're like, oh, gosh, I thought, you know, I just needed to make a business decision and cut tips. And I lost so much staff, where I had so many people like coming to me saying, like, I'm gonna have to leave if you don't, you know this, that that was such a, you know, significant part of my compensation and my income, and now I'm missing that, you know, it's almost like you, you know, demoted me. You know, I know you didn't mean intend for it to be that way, but that's how it felt. And so, you know, it is a lot bigger of it's a much more important piece, I think, too, than some sometimes people realize so to be able to have a solution that really doesn't impact anybody in a negative way, whether you're looking at the patients and clients or the people receiving the tips or the business owner. I mean, it really does, like you said, it's just a no brainer to have to have that

wonderful Well, be sure to check out all the links. We've got everything linked up below. This is a absolute no brainer, no risk for you guys, test out tippy, make some money, save some money. See how it works in your spa, in your practice. And if it doesn't work for you, you have no no contract, no there's literally no risk. So this is a great way to save some money and really be able to get those tips directly to your providers. All right. Marcy, thank you so much. This has been incredible. What a great offer. You know, I just, I feel like in the times right now, we need to be out there helping our industry as much as possible, providing as much value as possible, because it is a challenging time, and so for all of us working together like this, I love it. Thank you so so much. I really appreciate it.

Happy. This is wonderful. I appreciate it

as always. If you want to keep the conversation going, I want you to head on over to the spa. Marketing Made Easy. Facebook group, the number one free resource out there for estheticians focused on business building. We've got weekly marketing tips, a monthly goal setting and planning session, monthly esthetician business book club, plus a community of 1000s of estheticians committed to business building in the spa industry. I'll see you there.