U.S. residents are experiencing tipping exhaustion; Domino's believes it has a solution.
Domino's Pizza is trying to capitalize on the frustration people feel when it comes to tipping. Instead of abolishing tips, however, they're actually promoting them.
The pizza chain has launched a promotion that rewards customers with a $3 discount on future online delivery orders for every $3 or more they tip a Domino's delivery driver. This promotion, called "You Tip, We Tip," is running until mid-September.
As part of the campaign, Domino's released a commercial featuring people being asked to tip at various places like the grocery store, gym, and even a wedding. By the end, a minister asks for a tip. The narrator states, "At Domino's, we know there's a lot of pressure to tip these days. Domino's wants to say 'thanks for the tip' by tipping you back."
The ad has several purposes for Domino's. First, it's an indirect way for the brand to interact with consumers on a relatable societal issue. According to Kimberly Whitler, a marketing professor at the University of Virginia's Darden School of Business, "When ads connect with consumers on a meaningful societal issue in a humorous way, they can have a better chance of breaking through."
Second, the $3 promotion could help increase sales. Consumers are constantly seeking savings due to rising prices over the past three years, primarily caused by the COVID-19 pandemic.
Lastly, the advertisement functions as a labor recruitment strategy, according to RJ Hottovy, head of analytical research at data analytics company Placer.AI. "It's gotten more competitive to attract drivers," he said. "Domino's can point to this as a way to recruit new drivers while keeping existing drivers happy."
Domino's did not respond to CNN's requests for comment on the ad or the driver's pay.
Recent surveys indicate that Americans are tipping less but are being asked for them more often. This emotional exhaustion, also known as "tip fatigue," is a problem for both Domino's delivery drivers, who rely on tips to supplement their income, and the company's business model.
One Domino's delivery driver in Florida, speaking anonymously because they weren't authorized to speak to the media, said tips make up a significant portion of their income and are crucial for those who work in delivery. "We lose employees and experience frequent turnover due to low or no tips."
However, Saru Jayaraman, president of advocacy group One Fair Wage, views Domino's campaign as a way to avoid paying their workers a livable wage and instead rely on customers to cover the difference through tips. Domino's delivery drivers' salary is connected to their tips. The company pays them what's known as the "subminimum wage" for tipped workers in 43 states. In 2023, the federal subminimum wage for tipped employees is $2.13 per hour, which is lower than the $7.25 federal minimum for non-tipped workers. If a server's tips don't reach this minimum, the law requires the employer to make up the difference. But this doesn't always happen, and wage theft and other wage violations are prevalent in the service industry.
Domino's ad campaign is actually a way for the company to "encourage people to tip more instead of paying their employees a fair wage with tips on top," she said. But the anonymous Domino's driver appreciated the campaign, fearing that if Domino's increased wages, their hours would be cut or their earnings would decrease.
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Source: edition.cnn.com
