Recent news stories have called attention to small businesses passing on increased COVID costs to their customers.
A headline in a Washington Post article in early February read “Companies are charging hidden covid fees; to make up for lost profits. They may be illegal.”
Press attention like this may scare salon and spa owners from doing what small businesses have been doing since the beginning of capitalism: passing on increases in overhead to the consumer.
Here are the cold, hard facts:
In order to adhere to new safety guidelines imposed by their state, salons and spas across the country have been forced to invest a significant amount of money in PPEs (personal protective equipment) along with additional cleaning supplies. Not to mention modifications made to workstations to allow for better distancing, protective glass, the list goes on!
The message is clear: if you do not meet the new safety standards, you cannot open.
What is a salon or spa left to do? Owning and operating a small business is challenging even in the best of times. For some, the margins pre-pandemic were already razor thin. Adding the additional COVID costs, coupled with reduced capacity was already a challenge.
Price increase or service charge
When the pandemic hit the US and businesses began shutting down, we at SalonTarget went immediately to work on new features that we knew would help soften the blow when our businesses began to re-open.
One of those features allows salons or spas that use SalonTarget to create and customize any Additional Charges, allowing you to add them to services/service categories that may require additional PPE, cleaning or extended time.
While some businesses have chosen to add additional charges to their bills, others account for the increase by simply raising their prices.
We find both of these approaches acceptable. Here’s why.
Salon and spa pricing is, for the most part, based on certain criteria which may include:
- Product cost
- Time required to perform the service
It is no secret that during this pandemic, the cost of every single thing that we spend money on has gone up. The key is to show the proof that your increased costs are being spent on the safety and well-being of the staff and their guests.
If you choose to do a price increase, that is your right as a salon owner. If you decide to call your new additional charge a covid fee, then you have to account for a possible future where you may have to take it away.
The choice is yours.
Be up front
You have a duty to your clients to be open and honest about what you are doing. The last thing you want is for your customers to feel they are being deceived in any way.
The best solution? Transparency and communication.
Get out ahead with some messaging. An email or SMS to your clients about COVID-related service charges (if you choose to label it as that) or a price increase is always a good approach.
Explain what the additional charge is for. At the end of the day, any additional charge helps to cover the increased cost of doing business, which allows you to remain open and keep your staff employed. When customers know that the extra they pay is helping to support small business as well as ensuring their own safety as well as yours, they will gladly oblige.
At SalonTarget we help our salon and spa clients stay transparent with their customers by providing them the option to display their service charge(s) on separate lines of their receipts.
COVID costs are real. They are on-going.
The only way to manage these additional costs is to pass them on. There is nothing illegal about that – as long as you do it right.
Have faith that by being open, honest, and communicative your loyal customers will be understanding and will reward your transparency by staying just that – loyal.
Want to learn more about our Re-Open Ready Features and the *NEW* SMS Connect feature? Get in touch today.