Q. There is a Rosh Kollel who came over to me in beis medrash, put $100 into my hand, and told me to get a haircut (because he felt that I have long hair). I subsequently cut my own hair, as I do not trust the barbers to be careful with my peyos and beard. Am I obligated to return the money to the rosh kollel, or may I do with it as I see fit?
I do not feel comfortable asking him this question myself (if I should return the money to him), as he is a tzaddik and a yirei shomayim and money means nothing to him (and, of course, he is not going to demand the money back from me, a bachur, due to his exceptional derech eretz); however, I want to do the right thing halachically, and at the same time I could use the money for other things. So the question is whether or not I should return the money to this tzaddik?

Another question is – Is it Ok for me to give myself a haircut (before Shabbos), even though it won’t be as good as in the barbershop, due to the above-mentioned reason of not trusting the barber even though he is frum, regarding the issue of peyos?

A. Horav Shlomo Miller’s Shlit’a opinion is that in principle you can keep the hundred dollars, even if a haircut costs much less or you did it yourself, since it was given as a gift and most likely not only for a haircut. However, “lifnei meshuras hadin” or choosing to “take the high road,” you should offer to give it back, explaining why.
As far as taking a professional haircut likvod Shabbos as opposed to cutting your own hair, that may not provide the same optimal results, if there is an Halacha concern in regards to the proper cutting of the peyos by the barber, it overrides the honor of Shabbos.

Rabbi A. Bartfeld as revised by Horav Shlomo Miller Shlit”a