The famed chossid, Rabbi Yisroel Jacobson, recounted the following story:
On the eighteenth of Elul, 5702, the (Previous) Rebbe spoke of a letter that he had received. In the letter, someone asked how it was possible that rabbis in America were clean shaven?!
The Rebbe responded:
“I am sure that if they remove their beards they have a halachik leniency and are not sinning, G-d forbid. However, they are causing others to sin. When their constituents observe that they have no beard, they assume that one is permitted to remove their beards with a razor.
“There is, though, a way for them to remedy the situation. It is explained in the Code of Jewish Law (Yorah Deah 87:3, Taz #4) that if an individual is eating meat and wishes to partake of almond milk, he should place almonds on the table so as to not cause confusion. So too, these rabbis have a simple recourse. They should take a small bag that contains the hair removal cream they use and place it on their nose. This way, no one will assume that they are sinning, G-d forbid.”
(Sippurim Chassidim, Vol. 1 Pg. 177)