Frank Craig, 33, from Port Glasgow, told the terrified staff: "It's not worth getting stabbed."
At the High Court in Glasgow, Craig admitted raiding Halo in Holmscroft Street, Greenock, on October 20 and taking £40.
Advocate depute Shirley McKenna, prosecuting, told the court that Craig has two previous high court convictions for assault and robbery and was jailed for nine years in 2006.
He was released on licence just four months before he robbed the salon.
The court heard that Craig entered the premises with another unidentified man and demanded money.
Miss McKenna said: "The accused had a long thin needle and told the staff: 'It's not worth getting stabbed. Don't move or I will jab you.'"
Judge Lord Bracadale deferred sentence on Craig until next year and called for a risk assessment to be prepared on the danger the accused poses to the public.
Craig hit the headlines in November 2008 when he went on the run from Castle Huntly jail after failing to return from home leave.
He had been granted a temporary release licence on the condition that he returned to the prison by 4pm on October 30, 2008, but failed to do so.
Craig was serving a nine-year sentence after being convicted of assault and three attempted robberies.
The Crown Office released his picture and he was later captured and returned to jail.