Why Eliminating the 10% Tip is a Bad Idea

Ana Perez, 9th Grade

Tipping in the Dominican Republic is one of the rituals of going out dining; after everything is set and done, diners fiddle with their phone calculators and tip their mandatory 10% (or higher) to their server. Even though this is practiced in most places around the world, tipping is, at its core, an imperfect system – but a necessary one. The “Ley No. 5432 del 24 de Noviembre de 1960” makes tipping a 10% of the total bill mandatory in restaurants, hotels, coffeehouses, bars, and other establishments. But, abolishing this law would make tipping optional. The problem? Staff in the food industry don’t make enough to pay for the cost of living without tips. And, in the long-run, it’ll affect the staff and the establishment itself.

However, the base salary for a server in the Dominican Republic was 12.2K pesos while the cost of living in the country for a single person is, on average, 30K pesos without rent, as reported by Numbeo (2021). Eliminating the 10% mandatory tipping would force them to rely on their base wages and the kindness of people’s hearts. Eliminating the 10% tip would drastically reduce the salaries of employees in the food industry. According to BOP (2019), some restaurants in Punta Cana do not pay their legal tip to their employees, although they are required to by law. And since the wages would reduce drastically, most staff members will leave and try to find better opportunities. And, in some Punta Cana restaurants, the 10% tip is already included in the bill – eliminating this could incentivize customers to stop tipping servers since they aren’t obligated to anymore. In various Brooklyn restaurants, the no-tipping policy caused most of the senior staff to quit their jobs because, without tipping, they simply don’t get as much money as they used to. A Marlow Collective employee said that employees are better and well-adjusted with tipping, as it gives them focus and an instant sense of gratification that makes them want to do a better job. 

It has also been concluded that a no-tipping policy might make menu prices increase to pay wages, which alienates customers from restaurants. Seeing a RD$1000 pesos bill with a RD$100 pesos of tipping will create a different psychological response than seeing an RD$1100 pesos bill. For example, as reported by Rudolph S. (2017), in most cases, if you’re buying something on Amazon and it costs around US$25 with an additional US$7 shipping for a total of US$32 vs. the same product that costs US$32 with free shipping, you’re most likely inclined to buy the second product. This is because of market psychology: seeing the word “free” or not seeing the additional costs will trigger a response making you buy the product because it gives the illusion of being “less expensive.” The bottom line, however, is that having to pay the additional price will alienate customers, who’d be happier to pay for the “cheaper” option. 

Whether or not most agree with or like tipping servers, it will continue to be necessary until wages in the food industry increase – but right now, these employees need their tips to make livable wages.

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