MILFORD — With a rising tide of counterfeiters selling fake cards and stamps online, the Subway restaurant chain is eliminating its popular Sub Club promotion after 20 years.
The Sub Club, whereby customers receive a free sandwich after filling a card with stamps indicating prior purchases, will be replaced with a new promotion by Oct. 1, said Subway spokesman Kevin Kane.
Company officials have for several years sought new promotions to replace the Sub Club, which Kane said is antiquated and susceptible to counterfeiting.
"Certainly, there was some fraud involved, and that was a reason," he said.
The Sub Club gives customers a paper stamp for each 6-inch sandwich or salad — two stamps for each foot-long sandwich — they buy. Once they fill a Sub Club card, which holds eight stamps, and purchase a soda, they receive a free 6-inch sub.
"It’s an old program," said Kane, adding that it dates back at least 20 years. "This is something that’s been in the works for a while."
Subway franchise owners and company officials started looking for replacement promotions several years ago, as they learned that counterfeiters were selling Sub Club cards and stamps, both authentic and counterfeit, on Internet sites, including eBay.
On Thursday, an eBay search for "Subway stamps" generated a list of 265 items, including one auction for a collection of 5,000 Sub Club stamps that had garnered a high bid of $5,600, with 10 hours of bidding still remaining. The seller, from San Antonio, had garnered more than 30 bids; the starting bid May 27 was 99 cents.
By midday Thursday, word of Subway’s decision to discontinue the Sub Club had spread on eBay, with at least one buyer from Louisiana posting a message warning other bidders not to buy the stamps or cards, since they will not be accepted after Oct. 1.
Promotions like the Sub Club are increasingly easy targets for criminals looking to exploit them through counterfeiting, said Joseph LaRocca, vice president of loss prevention at the National Retail Federation.
As soon as a company launches a promotion, such as coupons or gift cards, criminals begin looking for deficiencies in them, he said.
Counterfeiting has grown along with the popularity of the Internet, which makes it easier for criminals to produce counterfeit items and distribute them to mass audiences.
The problem, though worsened by the Internet, is not new, LaRocca said.
"The retail industry has been challenged for decades with people counterfeiting various sales and promotions tools," LaRocca said.
The resulting loss of revenue can be significant, he said, adding that retailers must be vigilant about safeguarding any promotions they offer before going public with them.
"It’s too late when the program’s already in the field and you discover a problem," he said.
Kane said Subway had not determined how much money may have been lost due to fake Sub Club stamps, but added that it was not much.
Two new Subway promotions are being tried in test markets throughout the country. Franchise owners will decide, by voting in their regional franchise associations, which of the two to implement, Kane said.
One promotion will allow customers to accumulate points, by making purchases, that will be tabulated on an electronic card. Customers will redeem the points for free food and drink by swiping the card through a machine.
Franchise owners’ other option is to offer more promotional specials, such as two-for-one deals on certain days of the week.
New Haven area franchise owners have not yet decided which option they will choose, Kane said.
The new promotions will allow the company to improve on flaws that became apparent in the Sub Club and safeguard against future problems, Kane said.
"There’s an opportunity to fix it," he said.
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