How to pay commission on EFT memberships

An EFT membership — the recurring monthly draft — is the sale that changes a tanning salon's economics. It converts a walk-in into predictable revenue, smooths the winter, and raises the value of every other thing you sell that member.

It's also the hardest ask at the counter, and the one most likely to be under-rewarded, because the money comes in over twelve months while the commission goes out this Friday.

The three structures

1. Flat bonus per sign-up

A fixed amount — $5, $10, $20 — for each membership sold.

Good: immediate, obvious, impossible to misunderstand. Staff can do the arithmetic in their head at the counter, which is exactly when you want them motivated.

Bad: you pay the same for a membership that runs two years as one that cancels in week three. If your churn is high, a flat bonus quietly funds the churn.

2. A percentage of the first draft

Commission as a share of the first month's payment.

Good: scales automatically with membership tiers, so a premium sign-up pays more than the entry one without another rule.

Bad: the amounts are usually too small to motivate. Ten percent of a $29 draft is $2.90, which does not buy a difficult conversation.

3. A pool, split by rank

Set aside a fixed sum each month and divide it among the top performers, weighted. A common split across the top four:

Good: your cost is capped and known in advance, and it turns EFT into a race. In a team where two or three people genuinely compete, a pool produces more sign-ups per dollar than a flat bonus.

Bad: it is winner-takes-most. Someone who finishes fifth got nothing for a good month, and in a large team the bottom half will disengage from it entirely. Pools work best on small floors.

Gate the pool, and check the gate

A pool usually pays only to people who also cleared some other bar — a share of their overall goal — so the EFT money goes to people having a good month rather than to someone who sold three memberships and nothing else.

It's also usually gated on the month being finished. That second gate is the one that goes wrong. If it's a manual switch, it needs to be off during the month and on at the end, and a switch that defaults to "complete" will pay out the pool mid-month to whoever happens to be leading on the 12th.

We found exactly that in our own system: the month-complete flag defaulted to true on any browser that had never touched it, and it was stored per-device rather than per salon. Nobody was affected only because everyone was still below the qualifying threshold. Worth checking yours.

The churn problem, and clawbacks

Whatever structure you pick, you are paying today for revenue that may not arrive. The options:

• Accept it. Simplest, and defensible if churn is low. Treat the commission as a cost of acquisition.
• Delay it. Pay after the second or third successful draft. Much better matched to reality, much worse as a motivator — staff discount a bonus they get in ninety days.
• Claw it back. Pay now, deduct if it cancels inside a window. Be careful: this is the single most resented mechanic in retail pay, and in some jurisdictions deducting from earned wages is restricted. Take advice before writing it into a plan.

Our honest view is that delay beats clawback in almost every case. A smaller bonus paid reliably does more for morale than a larger one that sometimes reverses.

Don't let it drown out lotion

A common mistake is making EFT so lucrative that nothing else gets sold. Product is your highest-margin line and it's an easier win on a slow day. If your board shows one big EFT number and nothing about product mix, that's what staff will optimise.

Show both. A product-share figure next to the bonus it unlocks — "56% product, need 25%" — keeps the other half of the job visible. More on that in the tanning salon commission structure guide.

Make the standing visible

A ranked pool only motivates if people know their rank. If the standings appear once a month, the competition it's supposed to create never happens — by the time anyone learns they were second by one sign-up, the month is closed.

That's the case for a board that updates through the day rather than a report that lands after payroll. CommissionBoard was built for this: the standings refresh from the POS while the salon is open, so a stylist can see they're one sign-up off second place while there's still time to do something about it.

Related: why a minimum to earn creates a cliff.