Togo’s illegal coupon practice uncovered by local prosecutor
A Contra Costa fraud prosecutor’s love for Togo’s sandwiches led him to discover an illegal coupon system, resulting in a $45,000 settlement and a judge ordering the sandwich chain to halt the practice.
Deputy District Attorney Dodie Katague said he goes to Togo’s about twice a week — enough that he signed up for their loyalty rewards program, which gives customers a $5 coupon for every $50 spent. But Katague noticed something was amiss: a $6.50 purchase was yielding him six points, not six and a half.
“I ended up adding it up, and realized I was spending over $50 to get to 50 points,” Katague said. “It came out to $58.50.”
The practice, Katague said, is known as Gaussian Rounding or banker’s rounding. The fact that Togo’s was advertising the point system as $1 for one point amounted to “an unlawful misrepresentation to consumers,” according to a civil complaint filed by the Contra Costa District Attorney’s office this week.
Katague said when he reached out to the company, its representatives immediately said they’d change the practice.
“I have to admit they were very cooperative,” Katague said. “When they realized they had done wrong, they said, ‘We’re going to fix this.’”
A Togo’s spokesman called it an inadvertent oversight, said the company took “full responsibility” for the error and immediately moved to reimburse customers.
“Our customer loyalty is very important to us. We thank Mr. Katague for alerting us to this issue and we’re glad to hear he’ll be returning soon,” Togo’s spokesman Brendan Wonnacott said.
An estimated 15,000 customers were affected by the point system, according to authorities.
Togo’s has 90 days to automatically reimburse customers’ points, meaning some folks may have free sandwiches coming their way and not yet realize it.
The $45,000 settlement is broken up between $10,000 for attorney fees, and a $35,000 fine, records show.
Chief Deputy District Attorney Doug MacMaster said it is not uncommon for prosecutors to bring forward complaints when they notice something illegal in their day to day lives.
“I applaud Dodie for pursuing this case when he saw that customers were being short-changed,” MacMaster said, “We also gladly investigate complaints from members of the public at large.”
Katague said the experience hasn’t soured him to Togo’s and he’ll still return for his favorite turkey and avocado subs.
“The way corporate cooperated with me actually made me want to eat there more,” Katague said. “We have cases that have taken two years and we still haven’t settled them. This one went quickly and that’s one reason why they got a lower fine than they could have.”
Anyone who thinks they’ve witnessed consumer fraud in Contra Costa can call the DA’s consumer unit at 925-9578604 or file a written complaint here. Contact Nate Gartrell at 925-779-7174.