Ashley Rivera is a 19 year industry veteran.

She's a former hairstylist and now she's a sales specialist and podcast host with Tippi.

Today we're going to hear all about the pros and cons of claiming tips.

We're going to debate on whether or not you should be putting in the bank, why or why not.

And we're going to learn about this thing called a tip credit.

And we're going to learn a little bit about, like, how Tippy can help us in our business.

Welcome back to the Hairdresser Strong show.

My name is Robert Hughes and I am your host.

And today I'm with Ashley Rivera.

How are you doing today?

Ashley?

Hi.

I'm so happy to be here.

Thank you for making, taking the time just to give some, the audience some context.

I met Ashley at Artist Palette Beauty Expo and she was a vendor.

You were a vendor there representing Tippi.

And I walked into the booth and I asked a little bit about what is Tippy and what do they do.

And we engaged in this whole conversation about, you know, how, how to think about tips.

And I don't think the conversations had enough, not at least as a standalone conversation.

It's usually part of a conversation.

So I'm looking, I'm very excited, looking forward to this because I know that to me this is huge.

Like I try to talk to people about this topic, about their tips, and people like seem to have made the made up for mind on how they feel about it.

So maybe we can give people some information, education and help people make the best decisions they possibly can.

So let's start off with your former hairdresser.

You still have your license.

Tell us like, what, tell us like your high level, like, overview of how, what's your story?

How'd you get to where you are, like where and where you're at now?

Yeah, awesome.

Well, yeah, 19 years in the industry and I love this industry so much.

I was at my previous job, a seven location salon and spa, for 18 of those years.

So I've grew up a lot in that company and learned a lot.

I've met so many people.

That's truly why I'm with Tippi today.

For the first 11 years, I was behind the chair, so I come from the, the place where I know I have that experience.

I get what it's like to be behind the chair and operate in a salon.

And then I recruited for about eight years for all seven locations, all positions.

And I got to dive really deep into school, schools and with Tippy now that I have all of that experience and I'm pouring that into Tippy now and it's been truly amazing.

Okay, cool.

Awesome.

So it's a hardware and software potentially for managing tips in the salon or shop.

And so we can learn, we can, we can learn a little bit more about it, about Tippy a little late, a little later, but let's just dive in.

You know, you working in that space base, you clearly would be what I would consider at least a subject matter expert is what they say.

So let's first start off with tips.

So like one, I guess actually I didn't mention this before we talked but like what is your position on no tip movement?

I, I don't love that.

I mean we got.

So let's just, let's just kind of like dive into what that means.

I mean we, we got into this industry because we get to walk in the door every day and make as much money as we want.

Right.

And like the sky's the limit and it's just that extra piece of the layer that connects you and that client together.

It really is, it's the thank you, it's the gratitude.

It's, it's so much more than just money.

And it's also, it's been a part of our industry for so long.

I just can't imag being without it.

Yeah, I was one of my, one of my buddies who's a salon owner.

I'm pulling it up right now.

He was, he sent me a screenshot and a link to an article and it was on.

Oh, it wasn't an article, it was this.

He took a picture of the.

It's a msn.com so mainstream news and the title of the talk was find out how you're wasting money on tips.

That should never be expected.

This is really a hot topic because the COVID everyone was so generous and tipping everybody even at the checkout line at grocery stores.

And so now everybody's like kind of burnout and like from tips and kind of annoyed and.

But I will say like this message, this our thing, he sent me it.

It did, it did talk about a bunch of different stuff.

And then they got down to hair and they have a picture of a barber and it says no tip for the barber who only buzzes your hair.

And they say a two minute buzz cut is not the same as a full on hair experience.

They have barely broken a sweat or haven't even bothered to chit chat.

So they're so you're off the hook.

Let's be honest.

The clippers did most of the work.

Toss them a thanks.

So I don't believe with the sense, I don't agree with the sentiment.

I think it's pretty, pretty cold.

And I think that that's a little bit of the conversation around tips from customers.

But they did say if we don't talk to our customers and provide them a good experience, then they shouldn't tip us.

And I guess I would not disagree with that.

So I mean, ultimately, I think at the end of the day, hairdressers, at least hairdressers.

I mean, I would like to let a barber talk speak for themselves, but as a hairstylist, I feel like my tips are safe.

And so why would I ever, ever say you don't have to tip me?

I mean, 40.

If you make 50%, somewhere around close to 40% of your income is tips.

So like getting rid of your tips is like walking away from 40% of your income.

It's crazy, insane.

Yeah, absolutely.

I, I can't agree with you more.

And you know, I think to your point, I think yes, their 2020 kind of had this like piece of.

Everybody wanted the piece of something.

Right.

And even going to get coffee in the drive thru were asked to tip.

You know, we're not in the game of nonsense.

You know, we're just not.

We're, we're here because this has been for years, decades of.

This is the, this is the norm in our industry.

Right.

So we're here to elevate that and just kind of help that along and become even better.

So.

Yeah, yeah.

And you know, I, there is a piece to this conversation that I feel like it's a safe space to bring up an observation.

It's like a macro observation.

Like it's not specific to this conversation.

It's kind of like across the board.

It does seem like, you know, social media is so heavily influential on the way people view the world.

I mean we saw with the election, you know, the polarization, it got really intense.

And, and if we didn't have social media would have been as intense.

I, I say no, it wouldn't.

Like, and I stand by that.

Like, we can have that debate all day, but I do think that echo chambers created by algorithms serve us the information we want to see and like tell us what we want to hear.

That's one piece of it.

But the other piece of it is if there's a narrative going around, we're all being heavily influenced by that narrative and then maybe we think that we need to act on it and if there's like an anti tipping narrative going around and then like maybe somebody who's like a social media power user, you know, they can't get away from this conversation, so they, maybe it makes sense to them.

And, and I'm here to say, get out of your echo chamber and take that money.

What are you doing?

Sure.

Or like, great, get, get back into work.

Yeah, and get back into work and give these people the best experience they've had.

You know, they can go see anyone, really.

I mean, they can go down the street, see anyone.

But what makes you different?

And that's, that's the piece you got to stay with.

Yeah, well, and I, I, I have to put a disclaimer on here because there are a number of folks and a whole conversation piece about what, you know, figuring out what you charge.

And we're not talking about how you charge right now, but it kind of is very much backing up against it.

But how you charge like people's.

The argument against tips is one of them.

There's multiple arguments, but one of the arguments against tips is people, they don't want the customer deciding if they're worth it or not.

And my, and the response that I like that I think is the best to that is, well, then charge what you want to make and then take the extra money.

You still don't get rid of tips.

Like a logic is, it defies logic.

Okay, I'm on a social.

I'm gonna digress here.

Okay.

I agree with you.

Pros and cons of claiming tips.

So like, okay, we've had the conversation about tips.

You know, if you don't want to take tips, then you could just turn this conversation off and go and wait for next, next week.

Next week's episode.

But if you're currently accepting tips, or maybe you're wondering, maybe I should be accepting tips.

We, we shall continue.

All right.

Claiming tips.

So once we get the tips, obviously if we use a system like Tippy or some sort of system where they're, where there's creating like a paper trail, then you're claiming the tips already.

And if you're, if you're using some sort of electronic form of tipping and you're not claiming it, and I think you're insane.

Unless the government does make good.

Do you know any, have you heard anything on the government, on the promise?

Heard.

Yeah, no, I haven't heard anything yet.

But it would be sort of amazing.

Yeah.

Like if we didn't have to claim our tips anymore based on like the government said so.

But in the meantime, claiming your tips, pros and cons.

Yeah.

Well, let's.

Let's go back to 2020.

I think that was a huge eye opener.

Right.

Like we, we were shut down, we were out of work.

And as hairstylists, I don't.

Or beauty professional in our industry, I don't know if we've ever been in any sort of situation where we've had to plan ahead and be prepared for something like this.

Of course, everyone tells us to and things like that.

But this was knock you on the, on your ground, you know, and a huge eye opener when you go and you are out of.

Out of work to.

To claim unemployment.

Unfortunately, people saw so much less.

And it was a shame because you are, you're worth so much, you work so hard.

And that again, is another layer of what you do every day.

And that just was a huge eye opener.

That was a big year for a lot of people to really take, take charge and say, you know what, we're not doing this anymore.

We're better than that.

And really level up and start doing it the right way.

Yeah.

And, you know, that's interesting.

So if you're a stylist or barber work, W2 Commission, I feel like that message was for you for sure.

And I guess like anybody who.

So, okay, that is one thing.

So it helps, it helps ensure that when you file for unemployment, if you're a W2 employee, that you get the max, because I think there's a max on unemployment usually, but you can push up the amount of money that you make that you make by claiming your tips.

I didn't even think about.

I didn't even think about that.

That's.

That's good.

Okay, so how about you?

Got anything else for us?

So, yeah.

What's next?

Yeah, well, that's one layer, but another piece is, is planning for your future investments, investing in yourself.

You know, we started going into schools and because I had that experience of going in and recruiting at schools, it starts there.

It starts at that beginning stage of knowing when you're going into the interview what to ask, how are you claiming tips, how are you going to support my financial future?

And that is a huge piece.

And I love that we're able to give them that element and that layer of it.

And I think it's really important so they can go and buy a house or invest in something and, and start building of a foundation for themselves, a solid foundation.

Can you, can you open that up?

I.

One of the people that I listen to on a podcast, he Likes to say, double click that.

Can we double click that on that and open that up?

So what do you mean?

Like, why is claiming tips have anything to do with buying a house?

Great, because when you go and you say, I need to buy this, this piece of property, or I need a loan for this, you have to show proof of income.

And how are you going to do that?

You're going to do it because you have proof of income and you're claiming it.

It's there.

The data is there.

You can't, you can't unfortunately go in and say, here's $5,000 in cash, you know, and that's just not the way it works.

So unfortunately, we need to start really advocating for ourselves and saying, like, that this is really important to me.

Yeah, the, the important piece here is dti, or debt to income ratio.

If you calculate your monthly and then subtract, take away 51%, I think is the H.

Someone said it was higher, but let's just say 50%, just to be conservative.

So take half of what you make for your monthly income, subtract the amount you pay in any credit card debt or loans or student debt, and then whatever you.

That number you have left over is your buying power.

And so, like, with that buying power, you.

You can increase that buying power by claiming your tips.

So every dollar that you, that you claim, you can use 50 cents of every dollar that you claim towards buying property or acquiring assets or buying, I guess, buying a car.

I.

I mean, a car.

We don't talk about buying cars here.

Because.

No, I was just gonna say investments.

Unless you're like a collector, and even then there's a high risk.

This is not financial advice, but I would never look at a car as an investment anyway.

Okay, so that, so we got.

So, like, your borrowing power is directly connected to your income, and your income is impacted by what you can prove.

Because before 2008, before Dodd Frank act, you could say whatever you wanted.

You could walk in to be like, I'm a millionaire.

You know, it's like, give me a loan and I got no money, though.

Oh, and that got us so far.

Yeah, exactly.

It caused their whole world to collapse.

Yeah, for sure.

Yeah, no, yeah, absolutely.

Okay, so we got.

Unemployment is higher because you're proving income, and unemployment is based on your income.

Oh, there's another one.

I wonder if you're gonna.

What you're gonna say next.

But anyway, the second one is, is your debt to income ratio, your borrowing power.

Any other reasons why we should be claiming tips?

Look, I'm not, I'm.

We're not here.

Like, I think we all can say, like, we don't want anyone to feel like they have to do something or, you know, something that they don't want to do within their business.

But the, the thing is, is we've.

This has always been a thing.

It's been a scarce thing.

It's been a free, like a, a fear.

What do I do with this, this income?

And I think it really is cut and dry, you know, especially if you go on the website, it's right there for you.

And to make it easy, to have the tools to make it easy is important.

So we want ease for salon owners, for employees, for, for everyone that's in this.

And, and to make it easier to bring these tools in for your company.

I think it just, it helps you, it continues to grow you and it.

And it also helps your employees too.

So the thing that comes to my mind is Social Security when you retire.

Yeah.

I mean if my math is anywhere close to right, then that's a significant more money that you will be able to get a percentage of.

That's if you believe that Social Security will be around later on.

I don't know about that, but I.

Those are the three areas that I can think of is your unemployment, because that's income based.

Your borrowing power, that's income based.

And your retirement from the government, because that's income based as well.

What are the cons of not claiming your tips?

Let's talk about the side, the cons that we have not mentioned.

Well, you could get audited, you know, so I think, I think there's definitely pros and cons to everything.

Right.

So when you're, when you're looking at bringing something into your business or doing a different practice or doing something different, you certainly want to start there.

But again, I'll go back to.

It's very cut and dry.

It is what it is.

There's no one's changing that.

So I think the best way you can save money in other ways would be something that you would want to look at and continue to do, claiming them.

Because what's going to happen is you're going to get audited or the stylist may be claiming them.

You don't know that.

And your numbers are off and it doesn't match.

So when that happens, it kind of puts you, puts a red flag there.

And, and that's kind of starts why you would be audited.

Okay, so now.

So I would.

We're.

I'm going to shift over to the salon owner because you were definitely just talking to the salon owner.

Yes, that was definitely the salon owner.

So for the, but real quick, the person who is not claiming their tips, the risk of an audit, can you just tell us what that is?

What is that risk?

Like what is the downside of getting audited?

And just in the.

An IRS discovering that you were not.

Claiming income, you're going to have to owe money.

You're going to have to owe a lot of money.

And it's just a really, it's so sad when that happens because it, it becomes thousands.

It really can, it can become thousands.

And it's, it's, when it happens, it's just like, oh no, that just.

They weren't educated enough and they didn't have the tools and it's, it, it can be really detrimental.

It's, it's kind of like a experience.

I don't, I wish, I don't wish upon anybody.

Yeah, totally.

And then, and then the piece about the, that you just mentioned was a piece that I'm not really familiar with myself.

So if, if you're a salon or shop owner, you have W2 employees and they're not claiming the tips.

And, and, and you're not, you're not asking them.

Because I had the last salon I was a W2 employee at, they would give you this form every month, I think, and you were supposed to fill it out.

But I don't know what the repercussions are if I didn't fill it out with them, but then I claimed it on my income.

So you were just alluding to what happens if as a business owner, a salon or owner or a W2 employee tip owner that has tipped and tip based employees or whatever.

I don't want to use legal terms here, but yeah, the salon owner that's watching, the shop owner that's watching that, that has a W2.

Can you explain what you were just talking about?

Because I don't think understand the nuances.

Yeah, sure.

I mean it, I think you mean if, if I was a stylist and I was bringing that to my accountant, it just, everything goes back to the business.

Right?

The business that you work at and everything should match.

Right?

Would I, would I bring my, my W2 at the end of the year and I go, and I go to my accountant and I claim my taxes, my not my income should match what my, my owner is saying what my income is.

If it doesn't, then I think it just starts this.

Okay, well it starts like A red flag.

And then.

And then they kind of start to look into why that would be.

And there's a risk for the business owner.

Yes.

If their employees aren't claiming their tips.

So, like, what is the burden on the business owner?

Like, is it the business owner's responsibility?

Like, are they liable?

Like, do you.

Can you speak to that?

Sure.

Yeah.

It.

It literally says it on the.

On the IRS website.

We honestly don't get involved with any of that.

But.

But we.

We just.

We just support it.

You're supposed to claim them on your.

On the payroll.

So basically.

So the business is.

It is the business's responsibility to make income calculating tips.

Yeah.

That's news.

That's so crazy that I.

Someone told me that, like, maybe two years ago, and I was like, that's ridiculous.

I've never heard that before.

Yeah, I mean, basically what it is is just recording that.

That extra layer.

You're just recording what that was.

Whether it was cash or whether it was through our system or.

Or through your POS system, you just.

You still just have that lined item.

That is crazy because it's like, I don't see how it's the business owner's business.

If my customer slides me to 20, I think that's my business.

Well, I mean, we can talk about the.

The.

The turning our.

Our heads to some things, right?

Yeah, but not.

If it's not.

If I'm the shop owner and it's not and I'm gonna get in trouble, then I need to be up all up in my people's business.

I'm not trying to scare anyone, but that's just.

That just happens.

I mean, fear is a very good motivator, you know?

Yeah.

Let'S go back.

Let's go to something.

So, so on this conversation, there was this thing called a.

Some sort of tip credit.

Salon restaurants have it.

Could you explain what it is and the process that we were in and the current status?

Yes.

So you could.

If you were claiming the.

Just on payroll, the.

The tip was going on the check, and you could, at the end of the year, get a credit for doing that and be basically being reimbursed on.

On that piece.

We, as the industry, beauty industry, were trying to do the same thing.

And we're.

We were definitely getting somewhere, but ultimately, I mean, really took it far.

And ultimately we're told, like, this is going to happen.

So it's frustrating.

I feel like a lot of things in our industry get kind of pushed to the side a little bit, but it's because People have a passion or have a purpose about it, and they, they want to continue this push and, you know, continue elevating our, our industry.

So I think if, if you have that, that want and that need, you need to get out there and start advocating for it.

But yeah, I mean, if it's, if it's happening in other industries, I think that it should absolutely happen with ours.

So would, would that require an act of Congress or can the IRS regulator do that?

You know, I don't know that question, but I believe that it would be at like a federal level.

Yeah.

Interesting.

Well, I know the PBA was working on it and I have the, the page pulled up right here.

That's right.

Yeah.

So, yeah, so it's like, you know, right now I'm working with the PBA or at least helping them and meet people.

And we, I, we were able to set up a meeting with this, with city council on my council member here in D.C.

to talk about the compact license, which is an issue they're working on.

And they were also working on this tax tip fairness thing where we would have the same credit as the salons.

And I'm really sad to hear that it's not working.

And I guess it goes to show that business owners out there, if you're like, if you want this, then you definitely need to tell your representative.

Unfortunately, the, the, there's.

I don't know how much energy is behind, behind trying to get this done now, considering that we're being told that it won't happen.

But just another kind of reminder that being actively engaged in your local, state and federal politics is important for your business.

If you're in business and you're ignoring what's happening, then you're not doing business.

Right.

That's here to hear.

Right here, sorry to say.

Hot take.

Anyway, so moving on.

So what.

So we talked about.

Oh, okay, so like, claiming your tips.

Does that mean putting it in the bank?

And like, why would you put them in the bank or why would you not put them in the bank?

Oh, gosh.

I think you, I think you have a, a good perspective on this.

I know that we talked about it before, but taking a piece and investing it into something that can be better or more money and be more proactive in that, in that space.

I mean, I couldn't agree with you more, but I do think there could be more education behind it.

So, you know, I think people are a little nervous about it just because they just don't know much about it.

And I think, you know, getting involved in In.

In more talks.

Like, that is super important.

I myself am a little like, I know, I know some about it and of course, like, my husband's very involved in that, but there's a piece of me that wants to know more about that as well.

But I do think it's important for people to know that it is a huge chunk of your income.

So if you can make it grow for you and work for you, then that is where you should be focusing on for sure.

Yeah.

And I mean, even.

I guess as you're.

As like this is all being talked about.

My first.

The thought that comes to my head is the reason why we have bank accounts is, you know, if you keep all your money in your mattress and your house burns down, you know, that kind of thing, you know, you lose all your money.

That's true.

Yeah, absolutely.

Yeah.

And Cat.

And again, cash goes back to, like, it only takes you so far.

You know, it just.

There has to be some sort of, like, trail and reason and meaning behind it.

Yeah.

And the.

In the assets, based on my research and my studies, the assets that tend to help people gain wealth are owning stocks and real estate.

I mean, those are the two most common wealth builders.

And you.

And you can't buy either with cash.

I mean, in theory, you could buy a house with cash, but that's like, if that's on, that sounds like a huge risk.

Like, because that's all public data.

Like, if you buy that with unclaimed money and you get audited, then you're going to look like a criminal.

Like, people are going to think you're going to drug dealer or trafficker or something like that.

So I don't know if anybody is listening or watching that that has bought their house with unclaimed cash.

I'd love to hear from you.

You probably will not tell me who you are, but I would love to have that debate if somebody out there wants to have that one.

Do you have a take on that?

No, but I would love to hear the story.

Yeah.

Really?

Okay, cool.

Well, I mean, I think this is good.

It was all things tipped and a couple of hot takes and some education, and I think this is good.

So bottom line is it sounds like if you want to change your life, then you should claim your income so that you can.

You can have the opportunity to do with it what folks do who build wealth, you know?

Yeah, yeah, yeah.

That was.

I said that without giving advice.

You know, financial advice is, like, tricky.

You know, you got to be careful for sure.

Yeah.

All right, well, everybody out there.

You've.

You've heard it here.

You heard about.

You heard about tips, why you should claim them, the pros and cons.

And so tell us, tell us, tell us how we could find you what, what it is that you're talking about.

You mentioned Tippy a little bit.

Yeah.

Littered throughout there.

But why don't you take a moment for, as we wrap it up, to give people the.

The why and the what and the how.

Oh, my gosh, I'm so excited to tell you about it.

So Tippie is a software that was born in a salon and it was because we were going cashless and we needed a way to still provide the tips every night to the, to the service professional walking out the door.

So Tippie is a kiosk that you can use at the front desk.

We're integrated with some POS systems as well.

So you can tip.

You can go to the kiosk and tip.

Your service professional directly instantly goes to them.

And they even know your name.

They know how much you left them.

And then they also have like a little picture next to the percentages that suggested percentages based off of the service.

So it's just again, bringing back that personalization.

The reason why people tip you is because they loved you.

They just loved that experience and they want to be able to do it easy.

Professional.

You know, the, the customer doesn't have to have an app either, so that's kind of takes away that awkward talk.

And it's really nice to be able to use something like this.

And then for the, for the owner, it gives them all of that data, so we have a dashboard for them to pull reports.

We really try to make it super easy and bring back, like, the ease to being able to take that data and do something with the.

The service professional also has an app that they can look at their income for the day.

They can filter it out for a week, month, year.

They can see everything.

So it's really nice to be able to track some, track all of that.

Nice.

Awesome.

Yeah.

How can people find you?

Yeah, awesome.

Well, I'm on social media.

I have.

I don't know what's your handle?

Your, like, the best way to reach you is through a DM or email.

Yeah, I mean, you can go to Tippy, meet tippy.com.

you can find a little link for a demo and it goes right to me.

We can talk, we can chat.

We'll give you guys a free year to try the kiosk out.

So no strings attached.

We don't have contracts or anything like that.

So whole year for free.

Just try it, see if it's a good fit for you.

Nice.

Awesome.

Well, thank you for taking the time, and this was a great opportunity to talk about tips and only tips.

And this is great.

So thank you so much.

Yeah, thanks for having me.

Absolutely.

Take care and I'll talk to you later.

Thanks.