Even before Subway began franchising out in the early 1970s, its original shop in Bridgeport, Conn. developed the Sub Club loyalty program.
As of Aug. 17 this year, more than 30 years and 21,500 stores later, widespread fraud, coupled with employee theft, is forcing many locations - including all Lansing and Jackson-area stores - to halt the Sub Club, which allowed customers to redeem stamps earned by purchasing subs for free hoagies later on.
July 4 was the last day stores handed the stamps out.
"The program has become rampant with fraud and theft," said Ken Adams, owner of nine Lansing-area franchises. "We have had instances where people have made their own stamps with high-level photocopying machines. There is unfortunately employee dishonesty where employees steal stamps. We have found stamps being sold on eBay."
At one point last week, there were 42 auctions on eBay offering Subway stamps, including two 800-stamp sales from the same seller. Neither had been bid on, and each were listed at $99.99 each.
If the stamps were obtained legitimately, the e-Bay seller would need to have purchased 1,600 6-inch subs within the past six months to obtain that number of stamps before the expiration date.
Eight stamps earns a customer one free 6-inch sandwich. Since a 6-inch sandwich costs approximately $3.50, a customer would have to spend at least $2,800 to obtain 800 stamps.
"I never got any feedback from eBay," said Brian, a Detroit-area eBay Subway stamp seller who asked only his first name be used. Brian received the stamps from a friend who stole them from a store in White Lake, Mich.
"He said one day the cameras weren't on and he grabbed the whole roll. It had thousands of stamps."
Four or five times, Brian auctioned and said he sold 50 cards, or about 400 stamps, to the tune of about $75 each auction.
In the end, he profited about $325 off the sales. After selling the stamps on eBay and giving some to friends, Brian said he still has hundreds of stamps remaining. His friend, who voluntarily chose to leave the company, was never uncovered as the thief.
"It didn't get traced back to him but his boss figured out they were missing thousands of stamps," Brian said.
By late 2004 or early 2005, Subway customers can expect a new program which will incorporate newer, more secure technologies such as swipe cards or some form of Internet-based system.
But while franchise owners say theft and fraud resulted in the program's end, Subway officials say that's only one part of the equation.
"I'm sure that probably entered the conversation," said Les Winograd, public relations coordinator for corporate Subway. "The main reason was to update it and make it more of a value for the consumers. The old way is cumbersome."
