spa client reception

Trend Sorting – What is relevant for spas?

Hello to everyone, we hope your year is off to a good start!

The years are changing so quickly now that it’s becoming more difficult to remember what year it is, and the same goes for consumer habits.

Each new year brings a bevy of trend reports, which I always enjoy reading for their expert insights on particular sectors. Some of my favorites from this year include Retail trends from Shopify, Global Consumer trends from Euromonitor, and Skift’s Travel trends. The Global Wellness Institute always gives us detailed and relevant information on trends affecting the spa and wellness world in their global Wellness trends report. And this year, I found a really interesting piece on mindfulness trends in design:retail magazine, with examples that combine experiences and retailing. All of these are excellent reading on their own, and there are many ideas and concepts to glean and adapt to your own spa and wellness business needs. But after you read them all, you will probably see that there are really just a few macro trends that we need to adapt to.

Here are the big three that stood out to me.

The Culture of Me:

spa client receptionProbably a result of both the growing population and the explosion of technology attracting our time and attention, people just really want to stand out as an individual. Consumers don’t just want experiences, they want experiences that are tailored to THEM. You’ve no doubt seen the proliferation of DIY shops, where you can make artwork, or ceramics, or learn to cook. You can find myriad sources online where you can personally design clothes, sneakers, artwork, you name it, and have it delivered.

This concept certainly fits into what we deliver in spas – we just need to be hyper-focused on the personal aspect of personalized service. Greeting clients and establishing a real connection, using their name throughout their visit, and inviting them to return are no-brainers. But beyond that, how about simpler menus with swappable elements such as masking or hydrating steps? Perhaps a self-help mask or serum bar in the lounge or locker room? Customization options at retail, as pioneered by Bioelements many years ago, but possible in many iterations today. A beneficial side effect is that these options are not available online…

Community, in several versions:

  • Spa Communities TrendOne; consumers today, especially millennials, like to share their experiences with others. Going into a room for a treatment, alone with the technician, which boomers have always enjoyed, is presenting new challenges for spas. Quiet, dark, library-like spa spaces are not an appealing destination for many consumers today. This is a sea change that has to be handled from the design of facility and menu through marketing and operations. But it clear that socializing and enjoying experiences with others needs to be woven into our spa fabric.
  • Two; the sharing marketplace. The explosion of ride-sharing, co-living, co-working and material goods exchanging marketplaces is unprecedented. It has its roots in economic pressures, but once you get in the habit, it can feel wasteful to buy a new book when there are perfectly good “slightly used” options. Fortunately, spa experiences can’t be recycled! But what happens to slightly used or returned retail products, is there a women’s shelter that could use them? What about a “buy one, give one” promotion, a la Tom’s shoes? Just thinking out loud.

The Discount Mindset:

This is another concept that really took root during the recession, and has not gone away. Consumers have always been attracted to deals, and this holds true even in high-end and luxury markets. At Wynne Business, we have never been a fan of discounting spa services, but you do have to recognize the realities of your marketplace and adapt accordingly. If you are going to have to promote certain treatments in order to sell them, you will need to price them accordingly and preserve your margin.

Gift card promotions trend

Promotions that feature value-adds are always a good approach; a full-priced facial with a free mask or serum, or an 80-minute massage for the price of a 50-minute, still preserve your basic pricing but allow the consumer to feel they are getting a deal. How about a “bring a friend” promotion, that can also address the community aspect? It would appear that the search for a “deal” is here to stay, so your spa business has to participate while preserving profitability.

I’d love to hear your ideas and thoughts! Please visit our Facebook page and share your feedback.



Post-Holiday Spa Clean Up

It’s Time For Your Spa’s Post-Holiday Clean Up

Post-Holiday Spa Clean UpEveryone loves the holiday season, whatever one you celebrate, but the season does have to come to an end.  You may be the kind of person who likes to leave their Christmas tree up until mid-January, but the longer we drag out the holidays in a business setting, the harder it is to get the clients excited for next year.

In this, the last week of the year, it’s time to take stock of your facility and retail area.  Hopefully your careful planning in purchasing and displaying a carefully selected variety of holiday merchandise resulted in positive sales increases for Q4, but no doubt you have some merchandise left over.

Now, what should you do with the remnants?

When is the holiday officially over?  The answer is January 2.

I’ve walked into some salons and spas in mid-January and found them still decorated to the hilt with ribbons, bows, and fading poinsettias.  I believe that this is an area in which you should take your cues from major retailers, and denude your facility of holiday detritus sooner than later.  Just like Starbucks switches back to those plain white cups right after New Year’s, it’s time to start fresh.

First, box up and put away all of the reusable decorations for next, or another, year.  If you have living décors such as amaryllis, poinsettia or lilies, send them home with your staff members.  Remove stringed and hanging lights and decals from windows.  Drink up the Christmas blend coffee and distribute among staff and friends the rest of the cookies, cakes and other treats.

How about merchandise?

It’s okay to put merchandise on sale, but only for a short time.  Gather up all of the remaining bits and have a holiday sale table, for a week or two, but then it’s time to move on.  If they didn’t sell, bite the bullet and be decisive.  Some high quality unsold holiday-themed gift merchandise such as makeup brushes, jewelry, cosmetic bags and household décor items can be stored and reintroduced next October, but the rest you should remove from both your shelves and your balance sheets.  Offer it to staff for a fraction of the original price, sell it off (by the lot) on eBay, or give it to charity.

Purchased too many nail polishes or body lotions?   Negotiate with your vendors and see if you can trade for new spring items.  Overstocks of non-holiday themed items are particularly useful as grab bag rewards for client referral or loyalty programs.

Did you add special holiday services to your menu?  If any of these was a particularly good seller, you may want to consider adding a version of it permanently to your treatment menu, just make sure that you remove something else when you do, to ensure against a swelling menu selection.  Run a service sales report for the year, and consider removing any services that you performed 30 or less of.

The onset of a new year is also an ideal time for a good spit-and-polish cleaning of your whole facility, top to bottom.  This is often best accomplished by hiring an outside cleaning company, not your usual cleaners who by now are ignoring the same continual problem areas that you were when you handled the cleaning, or may still.  Fresh eyes and elbow grease are welcome.  Or, find a 4 to 5-hour window of time when the facility is closed and invite your staff to come pitch in; reward those who show up with pizza, sushi and/or movie tickets.  Perhaps, you can even give out raffle tickets for baskets of leftover holiday retail!

Are you ready to launch 2018 with new ideas and treatments? Do you need help putting together your plan? Tap into our experience and contact us for a free consultation.


Developing Your Spa Leadership Vision

When is the last time your spa management to-do list said “plan for tomorrow?”

I don’t know about you, but I’m a list-maker. I keep piles of pads near my desk, and every day I make a list and date it. I place the high priority at the top, low at the bottom. Every other week I take the pile of notes with half-scratched-off items and start over. It’s an old-fashioned system but it works for me.

Spa Directors and managers never need to sit down and make a list of what they will do each day, in fact, they rarely get the chance. Spa operations are very fluid and in-the-moment, and it’s easy to just go with the flow. Chatting with clients, listening to an idea or complaint from a staff member, meeting with a vendor who stops by unannounced (so annoying!), taking a call from the media, and maybe you get a chance to review yesterday’s numbers somewhere in the mix. Spa management is definitely not a desk job, although sometimes you may long for a few minutes alone in your office.

Is this a good thing?

It’s certainly essential that spa management is readily available, and up-to-speed on everything that is happening in the spa on a daily basis. But this focus on the here-and-now can result in a lack of focus on the future. Thinking about the future feels like a luxury to many spa managers. However, it is no luxury for the health of the business; it is essential that someone is thinking about tomorrow.

So where is the balance?

Finding balance is a different trick for everyone, and there is no quick or obvious solution. But one key is to notice that you need it and to start looking for ways to create it. Yes, the everyday details of the business need to be dealt with, but very quickly you will find yourself immersed in today (and sometimes yesterday) and leaving the “plan for next week, month, year” entry unticked on your to-do list. Spa business managers often operate from a reactive, rather than proactive, approach, because of the non-stop demands on their time. The only way to stop this is to carve out a period each day, or even a few days per week, to have some quality alone-time; this may be more readily accomplished out of the spa, in fact.

Spa Leadership Planning

Start small – an uninterrupted 30 minutes can do wonders and can be a springboard to more regular time-outs in the near future. Make some rules for yourself; this is not review time, it is forward-thinking time. Whether you use it to catch up on ideas from the spa trade magazines or to read the latest in business management trends and new concepts from Inc, Wired or HBR Magazines, or you just wander the local shopping mall and observe the stores and the people in them, you will open your mind to ideas and possibilities.

The hugely popular Mindful Magazine has many tips and methods to help you find some balance between high levels of activity and mindful pursuits. We can’t turn away completely from the demands of our daily schedule, but we do need to ensure that we create a plan to move the business forward, not just put out fires all day.

Help is only a few finger taps away; the Wynne Business Spa Director’s Management Intensive is now available as a self-paced online course. We offer an entire module dedicated to spa leadership essentials. Make 2018 your year to advance and register today.

Learn More About The Spa Director’s Management Intensive

Spa Competition

You versus Your Spa Competition: What makes a client choose your spa?

Unless you are a resort spa, directly after the holiday season, you are likely to see some quieting in your books, and perhaps even your regulars are MIA.  What is your plan to attract new consumers, and how will your spa stand out from all of the competition?

Spa Competition

You Vs. Your Competition

What Makes a Client Choose Your Spa?

Clients are becoming more aware than ever of the need for spa and wellness services; the messages cannot be escaped, even in mainstream media.  But there are plenty of people who are still not sure what happens in a spa, and even more who don’t know what wellness entails.

The nature of the spa industry in America is such that the word spa has no clear connotation; it may be attached to a nail, tanning salon or hair salon as often as it is used in conjunction with skin and body services.  The ubiquitous nature of the word is good for marketing in the sense that consumers are seeing it often and that reinforces the idea that spa is not just for special occasions.  But it’s not helpful if consumers don’t know what it is. Therefore, one of the main concepts framing your spa marketing plan has to be clear communication of what your particular spa is, and is not.

It is likely that you have massage, body and/or skin care services on the menu, but beyond that, what words or concepts help to define your spa?

Is it botanical, holistic, organic?

Do you use Italian products?

Are you known for your customer service or outstanding results?

Is your staff highly-trained?

Many spa owners try an everything-but-the-kitchen-sink approach to creating spa businesses; long lists of every treatment imaginable, but no soul or clear identity.  The more facilities like this exist, the more commoditized spa services become, and if your spa does not have a distinct identity or point of view, you will be lost in the crowd.

This article on branding gives some helpful hints on the best approach.   Certainly, one of the important focal points in developing a brand identity is to make sure it resonates with your previously identified target audience.  Don’t develop a spa concept or treatment menu because it interests you, make sure there is a community of prospective clients who need/want what you are offering, and also ensure that your spa is conveniently located for those prospects.

With this approach in place, you’ll have something to build on.



This article appeared first on the Booker blog.


Spa Therapist Salary: What should a spa therapist be paid?

Despite the lack of standard base salary, U.S. therapists earn the most worldwide.

What should spas pay spa therapists?Therapists in the U.S. are the best paid in the world and can earn up to US$4,166 (€3,100, £2,700) a month. Meanwhile their counterparts in Malaysia, with the worst salaries, only bring in US$308 (€231, £200). These were the findings of Real Numbers on Esthetician Compensation, a report published by leading industry body the Global Spa & Wellness Summit (GSWS) in April. One of the first analyses on global therapist pay, it marked the debut of the GSWS’s Metric Minutes – compilations of anonymously-sourced, industry data and stakeholder interviews that are designed to “simply start the conversation”.

Here, the GSWS has updated its findings to provide a snapshot of how aestheticians are paid in a selection of different countries – and the reasons why salaries vary so widely. The overview is intended to help operators and owners learn more about how our industry makes money (and in some cases does not).

On commission

Whether cultural, regulatory, or just habit, different countries pay beauty therapists in very different ways. Even taking into account the cost of living from one place to another, there are still major variances in average monthly pay.

In a large number of countries, the standard method of pay for beauty therapists is a monthly salary. Although, as shown in the table, there doesn’t appear to be any rhyme or reason to the amount of the salary. In almost every country, except for in the U.S., the salary makes up the lion’s share of monthly income, with commissions on services or retail comprising the rest. Service commissions are typically 5-10 percent of the cost of the treatment provided and are added to the monthly base salary.

In the U.S., however, it’s quite common for beauty therapists in day spas – which make up the vast majority of country’s spa establishments – to receive absolutely no base salary, earning all of their income as a commission on the treatment prices charged by the business. While this sounds unfair and quixotic, the result is that American therapists are the most highly paid in the world.

The U.S. also provides the biggest variety of pay plans which vary between states and cities or even two businesses in the same block. As there is no one-way things are done, methods of pay can be quite creative. Rather than paying a straight percentage for all therapists, for example, operators could offer more compensation to those who reach set benchmarks – such as better client retention rates and average customer spend – that help drive business. Alternatively, they can vary the percentage of compensation according to different services: paying less for treatments where a high amount has been spent on pieces of equipment, for example, to get a quicker return on investment. Slowly and incrementally, this is helping to offset the high staff overhead that U.S. spas face.

Retail commission – where therapists get a percentage of revenue from products they sell – is another possible add-on for salaries as spas all over the world offer products for home use. Globally, retail commission levels are fairly consistent at 5-10 percent of the retail price, which is typically all a business can afford on branded merchandise that already has high markup costs.

Benefits and taxes

Every country also has its own legal and cultural requirements for employers paying therapists concerning issues such as health insurance, retirement/pensions, and other social service benefits. The costs vary widely also, from an approximate 11 percent of payroll in the U.S. to as much as 40 percent in Sweden. It’s certainly incumbent on any spa business opening in a new country to fully understand all the different taxes and benefits that its expected to pay in addition to service provider salaries.

There’s no correlation between a therapist’s education and pay. Some countries require licensing for beauty therapy which typically involves up to two years of study. Meanwhile, in the U.S. an aesthetics license can be earned in many states in four months of full-time schooling; and there are still many countries, such as China, South Africa, Cambodia, the Philippines, and Brazil, where no license is required at all. However, the countries with the highest education costs are not those that pay the most. This could be a false economy – while an operator could potentially save money by hiring unlicensed therapists, the spa may develop a less desirable reputation, and incur additional in-house training costs as a result.

Something that is standard internationally is workers typically receiving 21 to 28 days of paid holiday a year. In China and Hong Kong, staff gets an extra months’ pay for Chinese New Year, along with two weeks off. That said, many global workers put in a lot of time and effort to earn such benefits – regularly putting in a six-day workweek, and in some resorts or on cruise ships working daily for two to three weeks before taking a day off.

In the U.S., paid time off is less generous: small spas will provide no paid leave, while spas that are part of larger brands will offer a week off after a year of employment, and that may increase to two weeks after two or three years of steady employment. Therapist schedules are also becoming shorter, often three to four days per week and part-time shifts are becoming more frequent as mandated health-care costs for full-time workers increase.

Growing concerns

Staff pay is, in most markets, the single biggest expense in spa business operations. This makes sense, as the inherent strength of spas is a labor-intensive product. But as companies continue to expand, and brands proliferate across country regions and borders, spa management teams should be aware of the differing pay, benefit and tax conventions. It’s not safe to assume that “what you’ve always done” in one country will be accepted in another, and this makes projecting turnover and profits more complex.

It’s no surprise that countries which pay the least in direct salary also have the lowest cost of living, however, this may also be a reflection of the importance of personal care to a specific locale or region, or the value placed on overall health and appearance. Spa services sit right at the crossroads of beauty services and healthcare, and in most countries spas are attracting increasing numbers of practitioners, who deserve the right to a fair living wage. But in situations where the desired pay is outsized compared to other overheads, it can make the ability for a business to earn a profit almost impossible, and negatively impact the growth potential for the industry as a whole.

If you have questions about spa employee pay and how to find what works for your business and your team, give us a call. Schedule a free 30-minute needs assessment here.





This article was originally published in Spa Business Magazine and on the Spa Business blog.

Spa Services

How to Plan an Effective Spa Discounting Strategy

Are you struggling to fill your spa appointment books, but not sure about the discounting route?  Proceeding with a cautious spa discounting strategy is the best plan.

Spa Discounting Strategy

Discounted pricing has become an important marketing tool in the battle to attract new clients, and keep the ones you’ve got.  But it’s an undeniable fact that discounts eat into your already slim profit margins, and can negatively affect cash flow.

You’ve no doubt heard some of the horror stories generated by Groupon experiences, which share a similar theme.  A small 4-treatment room spa that needs more clients decides to participate in a Groupon or similar promotion and ends up selling 400 vouchers.  The 400 “new clients” descend on the spa, which is unprepared to handle them.  There are not enough therapists, they’re not well-trained, and there is not enough laundry or front desk staff to ensure a smooth visit.  The clients have a mediocre experience (what they expect for $50 is another story) and vow never to return.  Some of them go so far as to post negative reviews on Yelp.  The spa closes soon after.

Happily, the Groupon obsession seems to have subsided, and not all spas that participated in these types of promotions went out of business.  But the fact remains that when you focus your marketing efforts strictly on price, you attract clients who are interested in price before all else; quality, ambiance, experience, the overall value that you can provide.

However, the concept of paying full retail for anything these days is not a given, especially for the millennial that are your clients.   This is the brave new world we inhabit; trying to build a brand and attract clientele, give them an experience that at a minimum meets their spa expectations, and preserve your cash flow and profit margins all at the same time.

Ever since WWII, Americans have been in love with the idea of discounts.  The thrill of getting something for less than the advertised price is more important than the acquisition, for many people.  Or at least for people who are focused on price, rather than quality.  Now our recent economic situation has created a new iteration on the discount strategy, the membership program.

No finer example of that exists in our industry than Massage Envy; over 700 locations, each grossing over a million dollars a year, and still growing.   Volume like that inspires a lot of wanna-be’s, hoping to cash in on this concept, but I think the Massage Envy ship has already sailed.  Not that you can’t have a discount membership program at your spa, but building an entire business around this concept has been done, and done well.

Certain industries have ingrained the discount message into consumers; just look at what is happening at department store JCPenney.  Penney’s hired the innovative executive Ron Johnson, the former Sr. V.P. of Retailing for Apple, to be the CEO last fall.  Johnson is credited with creating one of the highest sales-per-square-foot environments in the retail world at Apple, and Penney’s felt like it needed some innovation.  The idea was that Penneys would shed its discount and coupon-driven mantle, and focus on providing everyday low prices and value, and staying away from the “sale” word.  Turns out, folks that shop at Penneys like prowling the aisles for deals, and they’ve been staying away from the store in droves.  The jury is still out on whether this experiment to transform the company and its reputation will be successful, but I give Johnson credit for bravery.  I’m guessing it’s going to take more than just a few months to retrain the consumer on Penney’s new value proposition.  Why?  Because humans are creatures of habit.

So what does this mean for spas?

It means we need to be very careful about the message and image we convey to our target audience.  If we start training guests that our prices are as malleable as they are at the department store, we risk beginning a dangerous downward spiral.  Consider this interesting article, “Customers Will Pay More For Less,” by Alexander Chernev, in Harvard Business Review, in which two researchers discovered that consumers were willing to pay more for two separate items than they were willing to pay when the items were bundled together.  For instance, people were willing to spend $225 and $54, respectively, on two pieces of luggage when purchased separately, but when they were bundled together, consumers were only willing to pay $165!  The reason is attributed to a thought process called categorical reasoning and is especially present when an expensive item is bundled with a less-expensive one.

If you are creating special offers that pair higher-priced spa services with less expensive ones, you may be devaluing both of them in the eyes of the consumer.  Be strategic and consistent with your pricing, and you won’t run the risk of thoroughly confusing the consumer about your true value proposition.

Do you need help identifying a solid discounting strategy? We can help. Our team has worked with leading spas across the globe. Contact us for a complimentary needs assessment.



Spa Success In Unlikely Places

Spa Success In Unlikely Places

One of the crucial issues in spa marketing is to create a promise to the client that can be fulfilled by the spa, so that expectations are aligned with reality.  In recent years, I’ve visited two spas that exemplified this concept, and I was unexpectedly delighted with both.

Escape Day Spa Wyoming

It might seem like being the only spa in a small town would help ensure your success.  But what if that town was a mining town in the high desert, filled with pickup trucks and empty storefronts?  My first pleasant surprise of the week occurred at just such a place.  I enjoyed a facial performed with the expert hands of a well-trained esthetician, snacked on a variety of interesting dried fruits that are also available for sale, shopped in the well-stocked and merchandised boutique, and enjoyed the teamwork of a tightly-knit group of women who are setting the bar for their town, and it will be a hard act to follow for anyone else.  In fact, this spa is so delightful, it recently won recognition for being one of the best spas in all of Wyoming.


EscapeDaySpa-logo-gradientEscape Day Spa & Boutique has an “island” vibe, which adds to its allure as a fun retreat amidst the soaring skies and western vistas of this part of Wyoming.  The spa is located at 430 Broadway Street in Rock Springs, Wyoming. The treatment rooms are referred to as “cabanas” with names such as “Oasis,” and feature island references such as rolled bamboo ceilings and the gentle sound of waves in the background.  But there are no neon palm trees here, all decorating is tastefully done.  There are no locker rooms, but two changing rooms, one with toilet and shower, that are each fully equipped with every creature comfort, and are spotlessly clean.  The spa has been through one expansion and the owner is now planning to move it into a much larger space two blocks down the street.  Being the first on the scene, the owner and her staff have had to work hard to educate their clients about what to expect from spa services and products, but they’ve obviously been successful.


turning-stone-casinoMy next stop was the Skana Spa at the 1200 acre Turning Stone Resort Casino in upstate New York.  This bustling complex features five separate hotels, casino and event space, a sportsplex, numerous restaurants, and two spas.  While being a half-hour east of the city of Syracuse is not exactly the middle of nowhere, it is certainly not a “metro” area, and I was taken by surprise by the entire experience.  The line checking into the hotel on a Sunday afternoon was reminiscent of Las Vegas.


The Tower hotel offers Ahsi Spa, but I elected to venture through the casino, over the walkway and into the tranquil and upscale environment of Four Diamond award-winning Lodge to have services at Skana.  This spa offers 12 treatment rooms, salon, full men’s and women’s locker rooms with steam, sauna and whirlpool as well as a large co-ed whirlpool, and a Spa Café.  The treatments were expertly done, and I enjoyed the facility which supported the menu of services based on Oneida Indian culture, but did not call overt attention to itself.


Both of these excellent spas illustrated the point that you don’t need to be front and center in the spa universe to be successful or to provide a top-notch experience for your clients.  But you do need to have an identity and vision, to communicate that clearly in your marketing materials, and then be able to deliver on your promise to your guests.  As the army says, “Be the best you can be.”


Ready to take your spa experience to a new level? Contact us for a free 30-minute needs assessment.




A version of this post appeared first on Spa Standard.



Inspiration For Spa Leadership Challenges

Inspiration for Spa Leader Challenges

Do you ever wish you had more information that would help you to solve a problem?

Do you ever wonder whether you are the only one experiencing a particular challenge?

Fast Company - 30 Second MBAAs the spa business model continues to evolve, you may be presented with operational challenges that you don’t know how to approach.  But, as usual, if you are near a computer, inspiration is on the way.  Check out 30 Second MBA, brought to us by the folks at Fast Company magazine.  This website consists of video interviews with a variety of business-world movers and shakers on an array of issues, and they each last, you guessed it, 30 seconds or less.  The videos are organized by topics such as leadership, employee management, customer relationships, innovation, communication, and more, and the “professors” include luminaries like Mark Zuckerberg, CEO of Facebook, Tony Hsieh of, Jay Adelson, CEO of Digg, and many more.

Read more

Gift Card Accounting Processes

Get Your Gift Card Accounting Processes Ready For The Holidays

Do you have big plans for all of the money you received from selling gift cards and gift certificates over the holiday sales season? Not so fast—it’s not your money yet. You need a solid gift card accounting process.

A Brief History of Gift Cards

Spa Gift Card SeasonThe gift card phenomenon began in the US about 30 years ago and has continued its upward trajectory ever since, topping $127 billion in 2016. Gift cards and certificates are popular in spas and salons, and why not? You can never provide too many massages or pedicures.

As an industry, we’ve had a long learning curve in how to market gift cards and gift certificates, and much has changed from a legal perspective. In the beginning, we sold paper gift certificates that said “massage” on them; clients would stuff them in a drawer and show up to redeem them three or more years later. Even though there may have been a couple of service price increases between when the gift certificate was issued and when it was redeemed, clients would still get their massages at the old price. Today, many states have amended their laws so that certificates never expire, and most businesses have moved from paper to plastic or online gift cards. But the model of a business receiving cash up front for a service yet to be delivered is still going strong.

I can remember when this craze really set in during the late 1980s. We couldn’t sell gift certificates fast enough! We rented extra computers and hired holiday help to manage the long lines of purchasers during the month of December. It felt like winning the lottery. After the dust settled, we would figure out how to best spend all of this cash: new carpeting, an updated piece of equipment, bonuses for the staff, etc. We knew it wasn’t really our money, but we also knew that a significant portion of those gift certificates would never be redeemed, so it felt safe. That is, until our weekly gift card redemption rate approached 50 percent of business, creating a cash scramble to meet payroll.

A Lesson in Gift Card Accounting


Gift Card Accounting Processes

Does your spa have a solid Gift Card Accounting Process in place?

The lesson from the story above is that gift card revenue isn’t your money—it’s an indication that someone intends to do business with you in the future. When a recipient comes in to enjoy their Relaxation Massage or Scalp Treatment and Hairstyling, their gift card is just another payment method. As a consultant, I see a lot of income statements, and I’m surprised how often I see gift card sales listed under revenue, where they don’t belong. Let’s examine some of the accounting implications.


#1 Report Gift Cards as a Liability on the Income Statement

According to GAAP (Generally Accepted Accounting Principles), which is followed by most qualified accountants and bookkeepers, gift card and gift certificate sales should be recorded as a liability on your balance sheet; they shouldn’t show up on your income statement at all. The cash generated from the sales of gift cards should be put into an escrow account, separate from your regular bank account, that can be drawn upon as gift cards are redeemed. This is similar to what should happen in the sales of appointment series or packages.

Some accountants may handle gift cards differently, especially if your salon or spa is operating on a “Cash” rather than “Accrual” accounting method. According to Monte Zwang, Principal of Wellness Capital Management, some CPAs will leave gift certificate sales on the income statement of a Cash accounting business to more easily determine the net sold vs. redeemed revenue. Says Zwang, “I actually prefer to leave it on the balance sheet, even for Cash basis, so owners do not look at it as operating cash. If gift cards are recorded under revenue, as opposed to a Current Liability, you can’t look at your P&L and see how profitable you are. Sales is the money you are entitled to after you provide a service or sell a product. You will be overstating your sales if you record gift certificates as anything other than a Current Liability.”

#2 Review the Matching Principle for Gift Cards

As gift cards are redeemed, the supporting funds can be drawn out of the escrow account and put into regular checking, at least to the degree that redemptions outpace new purchases.  Lisa Neufeld, Operations Lead at Wellness Capital Management, adds that “outstanding liability on the balance sheet goes down, and cash goes up. At the same time, labor costs for performing service shows up on P&L and in the accounting world. You have just used the matching principle—matching revenue and expense in the period they actually occurred.” The services and products that are purchased with gift cards are recorded in revenue on the income statement, just like any other sale, so it’s entirely possible you won’t see the word “gift card” on your income statement at all.

#3 Unclaimed Property (Escheat) Laws and its Effect on Business Value

You should also be aware of your state’s laws on unclaimed property, or escheat. These laws provide a way for the state to recover some of the money lost if the gift card is not redeemed and a taxable sale is recorded. The federal CARD Act, which mostly pertains to credit cards, is an underlying statute, and each state has their own regulations regarding if and when any unredeemed gift card funds should be transferred to their coffers.

Obviously, you’ll want to handle your own accounting situation in a manner that is both legal and beneficial for your business. As Zwang says, “Leaving gift card sales on the balance sheet means the Income Statement will be a better tool to see how the business is operating throughout the year. That is what financial statements are for: to help clients make business decisions on a day-to-day basis, not to make it easy for the CPA to prepare the tax return!”

Remember that swelling gift card sales also mean swelling liability on your balance sheet. Should you ever want to sell your spa or salon, any potential buyer will look at that liability and want to know where the matching bank account asset is; if it doesn’t exist, your business value will shrink accordingly.

The Bottom Line

Gift card sales are an important tool to bring in new clients at certain times of the year, but they must be handled properly to keep your salon or spa financially healthy.

Do you need help finalizing a Gift Card Sales and Reporting Process? Contact us for a consultation.



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How Spas Help Battle Aging Using Non-Medical Methods

The International Spa Association defines the word ‘spa’ as “places devoted to overall well-being through a variety of professional services that encourage the renewal of mind, body, and spirit.” Can we add anti-aging to the mix?

We know how rejuvenated our minds and spirits can feel after a relaxing full body massage or body treatment, but the reference to the body, our physical selves, can be harder to judge.  After all, massages don’t make us look different. While they don’t necessarily want to look younger, most of your female clients would be very happy with the ability to halt the forward march of time, and stop aging in its tracks.

There have been so many advancements and developments in technologies of both products and equipment that slowing the effects of aging is almost becoming a reality, meaning that you don’t have to be a medical spa to provide anti-aging or rejuvenation treatments to your clients. A typical manifestation of the aging process is the appearance of your skin. Aging skin loses collagen and elastin from the dermis, causing skin to become less firm and radiant, and gradually to form wrinkles through the processes of glycation and cross-linking. Causes of aging are both extrinsic and intrinsic, and include too much sun exposure, lack of hydration, excessive intake of caffeine or alcohol, and genetic predisposition. Battling these symptoms used to require a visit to a healthcare professional or medical spa. But today’s new advancements in technologies mean that spas can offer progress in delaying the appearance of these symptoms on both the face and body.

Equipment for Anti-Aging Treatments

There are now numerous skin-tightening devices available for non-medical professionals:

  • Light-emitting diodes (LED) – These devices work by using light energy to trigger the regeneration of skin cells. Red light LED is said to be particularly effective at healing and skin repair. These treatments are painless and can be administered by estheticians or beauty therapists in half-hour segments.
  • Microcurrent – This technology employs low level electrical energy on the adenosine triphosphate (ATP) in the body to stimulate the body’s natural repair system. The therapist uses dual-tipped probes and a conductive gel to deliver the current to the skin, where it is said to improve circulation and skin tone.
  • Radio Frequency – RF devices work by emitting electromagnetic waves which heat the dermis and stimulate collagen production. Some RF devices combine the technology with other modalities, such as LED, to increase effectiveness.

In some countries, personal devices have been created which can safely be used at home.  Whether for deep cleansing and exfoliating, such as the Clarisonic skin brush, or anti-aging effects like LED masks or the Tria personal laser, clients are sure to desire the newest take-home devices to augment their spa treatments.

Products for Anti-Aging

Age Logic Cellulaire - Anti-Aging Product

Anti-Aging products like Age Logic Cellulaire can reduce the signs of aging.

Numerous advances in cosmetic chemistry have resulted in product formulations and delivery systems that produce excellent results, both in the spa during treatments, and continuing at home through follow-up home care.  Espa’s Lifestage line consists of three products designed to rejuvenate aging skin through Natural Encapsulation and Stage Release Technology; these products are not recommended for those under the age of 40. Thalgo offers several anti-aging ranges, including products utilizing hyaluronic acid, collagen, marine silicium extract and caffeine. Anti-glycation agents, vitamins C & E, and ATP are utilized in Age Logic Cellulaire crème from Rene Guinot.

Clients Must Do Their Part to Support Anti-Agina Methods

While it is now possible for clients to get desirable beauty-care results through these non-medical methods, with no pain or downtime, there is still no magic in skincare products or equipment. In order for clients to remain youthful beyond their years, they will have to do their part outside of the spa.  Avoiding sun exposure, one of the biggest contributors to premature skin aging, is an excellent start. Be sure to have plenty of sunscreen on hand to retail to your customers, especially during the summer months and travel seasons.  Also, train your entire staff to instruct clients, as appropriate, on the importance of their personal care outside of the spa. A regular routine that includes getting enough sleep, following a proper diet and drinking plenty of water on a regular basis will also provide a good foundation so that anti-aging spa treatments are even more effective.

Wynne Business can help develop a successful anti-aging consultation process for your spa.  Schedule a complimentary 30-minute needs assessment consultation with Wynne Business.


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