Panera Unfair Unlimited Sip Club Subscription Class Action

More and more companies are offering consumers subscription plans for all kinds of goods, including personal care items, supplements, books, and prepared meals. Now Panera Bread Company has joined them, but the complaint for this class action takes issue with Panera’s Unlimited Sip Club subscription for two reasons: It claims the drinks are not really “unlimited” and that the operation of the subscription is unfair.

Two classes have been defined for this action:

• The Michigan Class is all persons in Michigan who subscribed to the Unlimited Sip Club during the applicable statutes of limitations.
• The Consumer Fraud Multi-State Class is all persons in Iowa, Kansas, Montana, Alaska, Arkansas, Wyoming, West Virginia, Kentucky, South Carolina, North Dakota, and Utah who subscribed to the Unlimited Sip Club during the applicable statutes of limitations.

Subscriptions are profitable for businesses, because they lock customers in to consistent payments and because, the complaint says, they “minimize friction associated with routine transactions.”

The complaint’s first objection to the Panera subscription is that it is not truly unlimited.

The subscription offers access to all self-service drinks for $10.99 per month. The complaint quotes the company as saying that customers can “enjoy endless NEW charged Lemonades, coffees, teas, and soda.”

But the complaint alleges that “the fine print reveals that the ‘Unlimited’ offer of ‘Any Size. Any Time’ means only ‘once every two hours. Plus, unlimited refills while you’re in the café.’” The complaint claims that the drinks and refills should not be limited in any way.

The complaint’s second objection is that Panera engages in various not-entirely-straightforward practices in connection with the subscription.

The company offers the subscription via a one-month free trial, but the complaint alleges that the customer is “immediately charged a monthly fee for their first month.” The complaint alleges, “Even where a ‘free trial’ would not result in an immediate charge, tethering a free trial to enrollment in an auto-renewing subscription is a deceptive practice.” This burdens customers, the complaint alleges, because they have to remember to cancel before the month expires.

The complaint claims the subscription continues to renew automatically until it is canceled, thus “tak[ing] advantage of consumer inertia.” According to the complaint, “[a]utorenewal users are seven times more likely to ‘continue,’ or not cancel, their subscriptions after the initial period, compared to users enrolled in an autocancel subscription.”

In addition, the complaint claims that Panera makes it difficult for subscribers to cancel because it is difficult for them to find the cancellation link. Even after they find it, the complaint alleges, Panera “interferes with their choice by attempting to prevent cancellation by a discounted monthly rate.”

Panera also does not remind customers that they are being charged each month, the complaint claims, even when they have not been using the subscription.

Article Type: Lawsuit
Topic: Consumer
Tags: Automatic Subscription Renewal or Continuous Service Agreement, Deceptive Advertising, Deceptive Labels, Difficult to Cancel, Unfair Subscription Practices