Subway - Tastes Great, but Breaks the Law Doing It

So, Subway has a problem. No, I'm not talking about that story that The Onion published yesterday. I'm talking about the fact that Subway — or at least one Subway franchisee in Toronto — is ripping off their customers.

On February 4, 2013, the Canadian government eliminated the penny. In the months after that decision was announced, the government ran an education campaign to help both consumers and businesses understand how this would work. They explained that they expected businesses to use the same system as is used elsewhere in the world — all cash transactions would be rounded up or down, as appropriate, to the nearest five-cent increment.

The important part of that sentence is the all cash transactions part. If you're paying electronically — a credit card, debit card, or gift card — rounding isn't supposed to apply.

The other key piece of the equation is that the rounding, when it's necessary, is supposed to take place at the end of the transaction. In other words, you add up the items being purchased, calculate and add the applicable taxes, and then decide whether or not the total needs to be rounded up or down if the customer is paying cash.

Last weekend, I was running around downtown doing some errands, and I stopped at the Subway on Yonge Street just north of Eglinton Avenue to pick up some lunch on the way home. After paying, I grabbed the receipt to put in my pocket, when I noticed something unusual. It was a single line of text, just above the sub-total, which read "Rounding $0.01".

Now, this was unusual for two reasons. First, as I said, this entry for rounding was just above the sub-total. That's out of sequence — rounding is supposed to be the last thing that happens. Second — and more importantly — I paid using a debit card. Rounding shouldn't be happening, period. I brought both of these to the attention of the sandwich artist™ behind the counter, who clearly didn't have a clue what I was talking about. But, to her credit, she went and got the owner on the phone and, after a couple of minutes of conversation, she came back to tell me that the owner had no idea that the register had this problem and would get it fixed. I was skeptical, but benefit of the doubt and all that.

Today, I stopped at the same location to pick up lunch again. Same order, same result — entry for rounding above the sub-total and rounding on a debit card purchase. Once again, I pointed out the problem to the sandwich artist™ — different one than last week. She had heard about the problem from her co-worker, but that was the extent of her engagement with the issue.


Receipt from today's Subway visit. Doesn't differentiate between cash tender and debit payment, but it was definitely a debit transaction.

So, Subway has a problem. The owner's aware that the register is breaking the law and doesn't appear to have done anything in the last week to fix it. Maybe it's impossible to get it fixed within a week, in which case I'd think he'd want to make sure his staff is letting customers know about it. I don't know for sure, but I'd have to believe that the register has probably been doing this since they would have programmed it back in February, meaning that hundreds — probably thousands — of customers have been hosed during this period.

And here's another thought. While each Subway location is franchised from the parent and independently owned, it's not a stretch to assume that the cash registers are standard — they're using register paper that's branded on the back, after all, and the receipts have messaging that's common to all stores. Subway has 2979 locations in Canada — is it possible that every single one of those locations is similarly hosing their customers?

Yeah, Subway has a problem. Now let's see just how big a problem it is.