Panera Class Action Lawsuit Filed Over Allegedly Hidden Delivery Fees [UPDATE]

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Panera Bread Company faces a proposed class action that alleges the restaurant chain has imposed additional, hidden fees on delivery orders despite promising that consumers will pay only a “flat” delivery charge. 

Although the fast-casual restaurant has prominently marketed flat, low-cost delivery amid the coronavirus pandemic, Panera, the 21-page lawsuit alleges, “secretly marks up food prices for delivery orders only by 5%-7%,” thereby “deceiv[ing] consumers into making website or mobile app food purchases they otherwise would not make.” 

“In order words,” the complaint says, “the identical sandwich costs approximately $1 more when ordered for delivery than when ordered via the same mobile app for pick up, or when ordered in-store.” 

According to the lawsuit, Panera’s true delivery costs are obscured and far exceed the promised flat, low-cost delivery rate, in apparent violation of California’s Consumers Legal Remedies Act.

“Specifically, Panera omits and conceals material facts about the Panera delivery service, never once informing consumers in any disclosure, at any time, that use of the delivery service causes an increase in food prices,” the lawsuit alleges. “Hundreds of thousands of Panera customers like Plaintiff have been assessed hidden delivery charges they did not bargain for.” 

The suit claims Panera’s obscuring of its delivery fees has given the company an unfair advantage over some competitors who “fairly disclose their true delivery charges” through their apps and websites.

The arrival of the coronavirus pandemic escalated the value of online and mobile-app food delivery services from one of pure convenience to a “comforting necessity” for consumers, especially those who feel uneasy leaving their homes and going out into public to buy food, the case relays. The lawsuit says that in light of the surge in popularity of food delivery, Consumer Reports highlighted the need for transparency for those who use restaurants’ apps and services, picking in particular at companies who “employ design practices that obfuscate fees” so as to conceal from patrons what they are being charged for and how their money is being spent. 

According to the lawsuit, Panera’s website and app allow consumers to place an order without creating an account, and do not require affirmative consent to the restaurant’s terms of service. The disclosures the defendant does make with regard to its ostensible $4 delivery fee are “false and misleading” in that consumers are not told of the additional five- to 10-percent markup added to delivery orders, the suit alleges. 

“This secret markup—which Panera only applied to delivery orders—is a hidden delivery fee,” the case claims. “This alone renders false Panera’s promise of flat, low-cost delivery, which is made repeatedly in the app and the website, and then in the ‘Delivery Fee’ line-item on the order screen.” 

The suit, which was removed to Missouri federal court on March 11, looks to represent consumers in California who, within the applicable statute of limitations period prior to the filing of the lawsuit, ordered food for delivery through the Panera mobile app or website, and were assessed higher delivery charges than represented. 

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