New York (CNN) 鈥� Americans are being asked to for everything from a cup of coffee to self-checkout at grocery stores, and many are frustrated with the new tipping culture.
Pizza chain Domino鈥檚 aims to tap into that exasperation. Not by eliminating tips, however. Instead, Domino鈥檚 is encouraging tipping even more.
Domino鈥檚 launched a promotion that rewards customers with $3 off a future online delivery order for every $3 or more they tip a Domino鈥檚 delivery driver. Domino鈥檚 鈥淵ou Tip, We Tip鈥� deal runs through mid-September.
鈥淎t Domino鈥檚, we know there鈥檚 a lot of pressure to tip these days,鈥� a narrator says in a cheeky new showing people being asked to tip at the grocery store, gym and even a wedding. 鈥淒omino鈥檚 wants to say 鈥榯hanks for the tip鈥� by tipping you back.鈥�
The promotional strategy serves several purposes for Domino鈥檚.
First, the ad campaign is a 鈥渃rafty鈥� way for the brand to engage with consumers, Kimberly Whitler, a marketing professor at University of Virginia鈥檚 Darden School of Business, said in an email.
鈥淲hen ads connect with consumers on a meaningful societal issue in a humorous way (the minister asking for a tip at the end of a wedding is clever), they can have a better chance of breaking through,鈥� she said.
Second, the $3 promotion may help Domino鈥檚 grow sales. Customers are hunting for deals so they can save money after three years of driven in large part by the Covid-19 pandemic.
Third, the advertisement is a labor recruitment strategy, said RJ Hottovy, the head of analytical research at data analytics company Placer.ai.
鈥淚t鈥檚 gotten more competitive to attract drivers,鈥� he said. 鈥淒omino鈥檚聽can point to this as a way to recruit new drivers while keeping聽existing drivers satisfied.鈥�
Domino鈥檚 did not respond to CNN鈥檚 requests for comment on the advertisement or its pay.
Some show that Americans are tipping less, while being asked to do so in more places. Tip fatigue is a problem for both Domino鈥檚 delivery drivers, who make a meaningful portion of their income from tips, and Domino鈥檚 business model.
鈥淭ips make up most of our pay and are incredibly important for those who work deliveries,鈥� said one Domino鈥檚 delivery driver in Florida who spoke under the condition of anonymity because the worker was not authorized to speak to the media. 鈥淲e lose employees and encounter frequent turnover because of low or no tips.鈥�
But Saru Jayaraman, the president of advocacy group One Fair Wage, sees Domino鈥檚 campaign as a way for Domino鈥檚 to avoid paying its workers a traditional wage and shift the bulk of their pay to customers in the form of tips.
Domino鈥檚 delivery drivers鈥� pay is linked to tips. Domino鈥檚, like most companies in the restaurant and hospitality industry, pays its delivery drivers what鈥檚 known as the for tipped workers in 43 states, said Jayaraman, whose organization advocates to end the practice.
The federal subminimum wage for tipped employees is $2.13 per hour 鈥� lower than the $7.25 federal minimum for non-tipped workers 鈥� though many states require higher base wages for tipped employees. If a server鈥檚 tips don鈥檛 add up to the federal minimum, the law says that the employer must make up the difference. But this doesn鈥檛 always happen. Wage theft and other wage violations are聽聽in the service industry.
Domino鈥檚 ad campaign is a way for the company to 鈥渆ncourage people to tip more rather than pay their workers an actual minimum wage with tips on top,鈥� she said.
But the Domino鈥檚 driver said they were 鈥済rateful鈥� Domino鈥檚 promotional campaign exists, and were fearful hours would be cut or earnings would go down if Domino鈥檚 raised wages.
The-CNN-Wire
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