This article first appeared in the St. Louis Beacon, May 28, 2009 - Living about an hour south of Lincoln, Neb., Lee Carr doesn't get to the Panera Bread Co. cafe there more than a couple of times a month. When he does make the trip, he's looking for a bargain: a baker's dozen worth of bagels and a couple of tubs of cream cheese to go, all for $4.50.
That's not the price listed on the company's menu board -- but that's the price Carr has been paying for the cards he bought on eBay, part of the St. Louis-based bakery's customer loyalty program, to get his bagel pack "free."
But as the company has discovered, to its dismay, not all the cards come from loyal customers. Many of them come from online scammers who are taking advantage of the Panera program to make money for themselves.
As a result, Panera, which operates in its hometown as the St. Louis Bread Co., is discontinuing its card program as of June 30; company-owned bakery-cafes stopped handing out the cards for frequent buyers of its drinks and bagels at the end of April. If you have partially completed cards, it will redeem them as if they were complete.
Linn Parrish, Panera's vice president for public relations, said the company spotted the scam when completed cards started showing up for sale on eBay, the popular online auction site. She said eBay has assisted the company on occasion in trying to combat such fraud, as it has helped other retailers. She said Panera did not want to disclose the financial hit that it has taken because of the bogus cards out there.
In Nebraska, Carr showed no such reticence. He said that he is disabled and spends time online trying to find ways to stretch a dollar. "If I can save a little money going out to eat," he said, "I'll do it. Panera is something we love, but we can't afford to go there all the time, so that's why we use these coupons."
When he spotted the Panera cards up for bid, Carr said, he bought a pack and has been trying to sell them two at a time to make some money while holding back some for himself. He says he has been getting between $6 and $9 apiece for the cards. With the ones he has kept, he has gotten his bargain bagels.
"We get a couple of dozen bagels," Carr said, "and we're set for a couple of weeks."
The cards that Carr bought do not appear to be mass-produced, like counterfeit money. Rather than showing stamps that are all identical, down to how they are oriented on the paper, they appear to have been stamped by hand.
Altogether, Carr said, he has probably bought about 30 of the fully stamped cards, spending as much as $200. He has a dozen left and plans to sell eight and use four. He said he has never had any problem redeeming them, but he was recently told that the program would be ending at the end of June, though he wasn't given any reason.
He understands Panera's motives in discontinuing the deals in the face of what seems to be widespread fraud. But he said he will miss the bargains.
"I worked as a restaurant manager for quite a few years," he said. "My thought was that some employees are doing it. They can get the cards, and they can get the stamper, and that's all you need.
"I don't want to be screwed over, either. My income is low enough that any money I lose is of concern to me."
Not all the people who had cards up for sale were as willing to talk about the situation as Carr was. One responded to a request for comment with a terse:
"YMSK (you must be kidding)!!!!"
The eBay sellers take similar approaches to offering their cards, with a familiar liberal use of exclamation points: "The cards themselves are FREE!!!!"
A disclaimer quickly follows, worded the same on several different packs of cards:
"By law, I must mention that I am NOT an authorized dealer or associate of any of the brands or manufacturers offered in my auctions. All trademarks and logos mentioned are used for identification purposes only and are registered trademarks of their respective owners who reserve the rights of ownership. The use of any or product name mentioned in this auction is not intended to suggest that the company, trademark, or logo is affiliated or endorses these auctions in any wa" The final word ends the same way on several different offers, with no last letter or punctuation.
Another approach is complimentary to the chef:
"These coupons make it very affordable to feed a group and please them all. BE THE HIT OF ANY GATHERING! Everyone enjoys a good bagel, and Panera makes the best."
So, why should anyone pay for something that the seller got for free? Another explanation adds:
"You are bidding on my time and labor for collecting 5 Panera Bread drink cards. You will receive 5 cards. You are simply paying for my time of collecting these and getting the cards for free. Make sure your Panera accepts these because there are no refunds. ... Im not responsible for lost or stolen cards. Happy Buying."
Evonne Gomez of eBay said in an e-mail message that the auction does not allow fraudulent items to be sold, "and we take steps to combat the sale of any fraudulent items through our own tools and technology, member reports, cooperation with law enforcement and government agencies.
"We're unable to share specific data, but we do take action against sellers who we determine are violating our rules and policies. Such consequences range from removing the item to suspending the seller to referring the seller to law enforcement agencies."
Between eBay's enforcement efforts and Panera's move to come up with a foolproof successor to the loyalty program, the bogus benefits may end soon. Parrish, the bakery company's vice president, said it is currently testing another kind of loyalty program to replace the discontinued cards, though it hasn't decided exactly how it will work. She did, though, have one criterion.
"Any new program will be electronic," she said, "with tighter fraud controls. The trend in the industry is to move away from paper to electronic."