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The Curious Reasons Why Barber Shops Don’t Take Credit Cards
In the event that you wind up in a mother and-pop barber shop or hair salon of any sort, you may locate a typical (however irritating) situation in play.
In spite of the way that essentially, every other store on the square acknowledges credit cards, the barbershop is frequently the solitary holdout on that front, compelling customers who may have generally quit paying money for most things long prior to hit up the ATM.
All told, around 80 percent of consumer spending in the United States is done without cash, according to MasterCard. But why not many independently-run barber shops?
The reasons vary, but, put simply, the economics of being a barber is less like running an ordinary retail store than you’d imagine.
Most barbershop workers, for instance, are dealt with less like full-time staff and more like cab drivers or independent representatives, and most are required to either lease a chair for a level expense every month or pay a huge offer of their profit to the salon proprietor. Numerous work as self-employed entities, at the end of the day, and would all the more intensely feel the torment of tolerating credit cards than CVS or Old Navy may, because of cards’ frequently high exchange charges. (Square, for instance, charges merchants a handling expense of 2.75 percent for credit cards, which, for barbers, can mean a great many dollars less in profit on a yearly premise.)
Barbers also don’t make that much money, to begin with. Doing some quick barbershop math here: If you charge $20 for your average haircut and do about 15 haircuts per day, five days a week, that’s $1,500 a week, or $6,000 per month. Let’s say that you’re working a commission deal with the barber shop at a 60/40 split—so the breakdown for you is that you’re getting 60 percent of $72,000.
You’ll most likely get tips, and you’ll have slow and busy days, but if we go for an average of 15 people per day, you’re making $43,200 per year, before taxes and not counting the cost of supplies. (And that may be a little on the high end of things; the Bureau of Labor Statistics puts the average barber wage at $28,800 per year.)
Another reason for not taking credit cards is less spoken: dealing in cash makes it easier to avoid paying taxes.
“Tax evasion is relatively common, especially among both-rental salon workers,” Angela Barlow and James Hawdon wrote in a 2015 paper entitled “Sex, Drugs, and Deception: Deviance in the Hair Salon Industry”. “For example, to avoid paying costly payroll taxes on one or two employees, owners will sometimes make arrangements with the employees to pay them a higher wage in exchange for keeping things ‘under the table’ or for accepting a subcontractor form 1099 at the end of the year that defines the employee as working on a peer-job basis.”
One thing for barber shops to consider, be that as it may, is the quantity of clients who exit in the wake of discovering that they can’t charge their haircut, maybe not having any desire to be on the snare for more charges at the no-name ATM in the corner. Also, if tolerating credit cards implies that barber shops get only one more haircut daily, barber shops could be losing cash by adhering to money as it were. With regards to credit cards, as it were, the clients may very well be correct.
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