Tipping for Money: Domino’s Answer to Tip Fatigue

Americans are tired of tipping. But pizza giant Domino’s (DPZ) thinks it might have a solution.

Fighting Tip Fatigue

During the pandemic, many customers went out of their way to tip service workers, trying to offset mass layoffs, business hardship, and work that required in-person attendance in their own, small ways. But as tips moved into the 20% area and higher, and with persistent inflation stretching household budgets, consumers have grown tired of it. That’s what’s known as “tipping fatigue.”

Now Domino’s has launched a new campaign that offers rewards in exchange for tipping called “You Tip, We Tip ”. Here’s how it works: Customers who tip delivery drivers $3 or more via prepaid online orders will receive a $3 coupon for a future online order from the chain.

Pros and Cons

While the campaign is intended in part to fight tip fatigue — but some warn it could have the opposite effect.

Critics of “tipping culture” argue that tipping is a way for businesses to shift the cost of labor onto customers. Employees who earn $30 or more in tips each month can be paid a minimum of $2.13 an hour, per federal labor laws. Many states mandate higher wages for restaurant workers, and companies are required to pay the difference if employees don’t make federal minimum wage. Nevertheless, much of the cost of compensating restaurant workers can fall on customers.

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