September 2nd, 2010
01:45 PM ET
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Panera Bread's chairman says he believes that people are fundamentally good. His company has instituted a "cafe of shared responsibility," allowing customers to pay whatever they feel they owe, on an honor system, into a donation bin.

"It's not a soup kitchen," he says. "It's a wonderful human experience."

60% of customers leave the amount owed, 20% leave more and 20% leave less - often much less.

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Filed under: Business and Farming News • Casual Dining • Charity • News


soundoff (53 Responses)
  1. Melissa

    Depending on my day (how much I have,) I'd either take what's givin to me for FREE (because they are saying it's FREE) or I'd pay 50% of what they'd LIKE me to pay. I'm not middle class or upper class, and **I don't own a CAR... I walk every where or I take the local bus. As of (right now) I don't have a lot so I wouldn't pay the ridiculous amount they'd want. Believe it or not... but MOST people in general (as in most people in the world) can't afford to go to Panera Bread everyday. I've been there twice (the NORMAL Panera Bread Restaurants) and their food is so d*mn expensive. I bought a little panini and a small thing of soup and a small salad... and it amazed me how expensive that can be. Paninis (as you all know) are not normal or large sandwiches so I felt a little ripped off. I like paninis but not that much. Everytime I went, everyone looked well dressed and were using their nice laptops... It just seems to me, most of the customers are very financially well off...(I have Nothing Against "well off" people by the way... ) and Panera Bread attracts mainly these customers for a reason.... because they are so EXPENSIVE. :P Just being honest.

    December 28, 2010 at 5:17 am |
  2. Rip off

    Panera is horribly overpriced, I would actually go there if they did this. They skimp on everything and nothing except their most expensive sandwiches seem to even come with cheese, seriously how the hell is cheese not included on a deli style sandwich? Thats like charging extra for ranch/bluecheese when you get buffalo wings. With the exception of Fat Burger its probably the worst ripoff restaurant Ive been to and will never go there again until they fix their prices.

    September 3, 2010 at 1:47 pm |
  3. Michele Hays

    I only eat at Panera when I need wi-fi and food at the same time, largely because I'm offended that they're charging $6 and up for $.60 worth of ingredients, and not a lot more for labor.

    This SEEMS like an attempt to be charitable, but given my knowledge of markups, labor and other costs in quickserve restaurants, I have real doubts. This seems more like an attempt to take advantage of people's honesty and make those who don't pay feel bad, and I have to say, that makes me angry. If they really wanted to help out those who are struggling in this economy, they'd openly slash all their prices, or donate a portion of sales to the local food depository. This is marketing, pure and simple.

    How about they tell you upfront what their total costs (keeping in mind this is far more than food and labor- rent, taxes, utilities, etc.) are for each item, and then you decide what kind of markup they deserve?

    September 3, 2010 at 11:43 am |
  4. shankar

    There is a restaurant in Singapore ( http://www.annalakshmi.com.sg ) Check out the video review.http://www.razor.tv/site/servlet/segment/main/news/29570.html I have been there many times during my visits over there. Really good food and pay what you will. Singapore is not a poor country but a capitalistic with a heart.. There have been in business since 1986. So the concept works.

    September 3, 2010 at 11:20 am |
  5. MOCaseA

    Wish our Panera's would do this. There are a few dyas when I'm a bit short on cash, but am craving one of those Fiji Apple Walnut salads.

    September 3, 2010 at 10:29 am |
  6. PA_John

    Funny .. lots of "I'd pay what I owe" (and they define "owe" as much lower than sticker price), or "Take the free food", and then they cry "socialism". The folks who scream socialism also think that the government should not provide handouts like healthcare, or SSI, or Medicare/Medicaid, or reduced taxes, or civil services, and they have gone on record to state that the private sector should pick up the tab for those who are not doing so well (i.e. churches, charities, etc.) So, when a company does exactly that - tries to provide a service that could help others, and they are denounced. Y'all can't have it both ways...

    September 3, 2010 at 10:10 am |
  7. Ben

    Observing the results in the field would be any sociologist dream. I can only wonder how each "group" would behave?

    September 3, 2010 at 9:02 am |
  8. Wonder how long it lasts.

    I would pay what I owed, rounded up. On occasion, I'd probably add a dollar or two just out of concern that I hadn't properly done the math to account for sales tax/upcharges or had in the past paid a little less than I should have. In the end, they'd probably make out a very small amount on me. I'd like to believe that most people would behave the same way – and I, like the Panera CEO, choose to believe that most people are inherently good.

    Reading this thread, I do see that a significant portion of our people are not "inherently good" and would see this as an opportunity to get something for nothing. It's clearly not a free sample – it's a pay what you think it's worth. Does anyone seriously believe the food is worth nothing?

    September 3, 2010 at 8:25 am |
  9. James

    Around here there are several small produce stands that are unstaffed and have a box set up to drop off your payment. I do not know how successful they are but they do continue to operate so it must still be viable.

    September 3, 2010 at 8:08 am |
  10. Bob

    Funny all the comments about socialism: there is (was?) an eatery in the NYC financial district that ran the same way for decades. When the stockbrokers were having a bad run, they'd underpay; when they were riding high, they'd overpay to make it up. Hardly socialist, just assuming basic honesty and a little altruism. I'll give Panera credit for actually assuming their customers are honest, it's a nice change from stores searching you at the exit because they assume you're trying to slip out with something.

    September 3, 2010 at 7:42 am |
  11. mike

    You'd have to pay me to eat at panera.

    September 3, 2010 at 7:12 am |
  12. Dan

    I won't pay for their slop and I wouldn't eat if for free either.

    September 3, 2010 at 4:35 am |
  13. Edgar Friendly

    This is just dumb. I mean, it's good for a warm and fuzzy feeling maybe, like "hey, we're all happy with this transaction", but really? We operate in a system where it costs you something to provide a service, and you need to feed your family and whatnot, so presumably there has to be some profit in there for you as well. Panera might call their payments donations, but they still need to meet costs and pay salaries, so those donations have to add up to an average amount per meal. If they don't, Panera goes out of business.

    Rather than this donation hokum, why not simply come up with a truly fair price? Figure out what it costs you to make the food, then add your profit on top, and break those numbers down for people so they can see what exactly they're paying for. That would be a much more refreshing and honest way to do business than a pseudo-"pay what you want" model.

    September 3, 2010 at 2:03 am |
    • Michele Hays

      Exactly! Very succinctly put, should have read more thoroughly before I posted!

      September 3, 2010 at 11:45 am |
  14. The_Mick

    I know people of means who push an empty shopping cart through Costco at lunchtime a few times a week just to get the free food – if they grab a few samples of potstickers, chili, sliced ham, mini-tacos, etc. they've had a filling and free lunch. So while there are some people who will pay the suggested charge, I don't believe this is a workable enterprise. People are funny when it comes to money. I helped my mother when she was her late-brother's estate executor and later on I was my mother's executor and if there was a questionable statement in a will that meant $25 less to someone already getting $20,000 or more, they acted like a major swindle was going on if it wasn't resolved in their favor. Too many people lose their humanity when it comes to money.

    September 3, 2010 at 1:51 am |
  15. Mike

    I think it's amazing how tremendously pessimistic Americans are. First of all, what they're doing is providing a service in an economically struggled area, those who don't pay also have the option to clean tables or wash dishes, as many of those who can't afford the meal do. Secondly, to all of you who claim this will bankrupt them, I'm sure that one store will not bankrupt a company with over 1,600 cafes, and if upper management notices a drop in revenue I'm sure they will revert to the old ways, because at the end of the day, they too have families to feed.

    September 2, 2010 at 8:04 pm |
  16. Dorothy

    I think the reason it worked was because it was in Salt Lake City. The majority of people there are Mormon. They're some of the nicest, most honest people there are. They put Catholic guilt to shame, and coming from someone who's a teacher in a Catholic school, that's saying something.

    Note: anyone who wants to bash the Church just because I mentioned it, please do it somewhere else. :)

    September 2, 2010 at 6:31 pm |
    • whatever

      Then take your preaching to church. This is an economics forum, not a religious platform.

      September 3, 2010 at 11:03 am |
  17. Really Old Guy

    Wasn't ther an "Our Gang" episode like this?

    September 2, 2010 at 5:12 pm |
  18. SPRINGSGRANNY

    Sorry – I meant TeXas Pete.....typed just a little too fast.

    September 2, 2010 at 4:49 pm |
  19. SPRINGSGRANNY

    Tezas Pete – Didn't your mother teach you anything?

    September 2, 2010 at 4:46 pm |
  20. brian-chicago

    This idea has been instituted before, successfully, in local small businesses. It will be interesting to see if it works in a large national chain atmosphere where there is not as much loyalty or sense of community. Good luck.

    September 2, 2010 at 4:42 pm |
  21. Texas Pete

    I would grab all the sandwiches I could, and hike over to the nearest homeless shelter and start handing them out. That will teach the yuppies.

    September 2, 2010 at 4:37 pm |
  22. Kate

    Breadlvr, I hope you don't think that labor is included in sit-down restaurants. I have a full time job as a travel agent, and have to wait tables at nights to get by, despite my college degree from a very reputable university. I get paid $2.50 an hour. I certainly hope you aren't one of the a$$holes who just don't tip, or only tip a dollar, because you assume our paycheck is covering it. It doesn't. Stop being scummy and pay- if you are eating out and having people serve you then you need to reciprocate financially.

    September 2, 2010 at 4:27 pm |
    • Texas Pete

      Sounds like you should have majored in something worthwhile instead of philosophy or interpretive dance.

      September 2, 2010 at 4:38 pm |
    • Artemis

      Texas Pete:
      I, too, waited tables for the first six years of my career because my career field required a Masters degree, and the student loans approached six figures. I used that money to get the amount reduced to a manageable monthly payment for less interest in the long run, and waiting tables offered the flexibility for nights and weekends that I couldn't get in my career field (and it paid off because I was young enough to do it, at the time).
      I doesn't seem like you were thinking outside the box.

      September 2, 2010 at 8:12 pm |
  23. SPRINGSGRANNY

    I can't believe the people who would take advantage of a nice gesture. No wonder America is going to pot! You're the same people who complain about everything and are part of the problem!!!! Grow up and take responsibility for your actions....what happened to the Golden Rule? You probably never heard of it.

    September 2, 2010 at 4:25 pm |
    • Kathleen

      I'm with Granny.

      September 3, 2010 at 9:25 am |
  24. John D

    Yeah, but they won't dare put one of these stores in a low income area. We'll go ahead and let people in an affluent area pay what they choose. Nice way to seem like you're being noble...but not really.

    September 2, 2010 at 4:15 pm |
  25. Breadlvr

    When you pay what you think it's worth, do consider the labor cost too. Because that's where the main portion of the fee goes to...that's why I think it's pointless to leave a tip since the menu price includes the labor.

    September 2, 2010 at 4:15 pm |
    • Artemis

      Not at most of the sit-down restaurants out there. They have waitstaff, but their pay rate is somewhere between $2.01 to 2.96 per hour where I live, which also include no benefits (insurance, holidays or sick time). So, no, the price of the meals include the cost of the cooks and dishwashers only (usually 1/2 or so of staff).

      September 2, 2010 at 8:05 pm |
  26. always runnin out of frontega chicken

    I'd pay what I owe, but they'd have to stop running out of panininis first!!!

    September 2, 2010 at 4:07 pm |
  27. amayda

    I am a cheap-skate and a deal seeker, but when it comes to food I will pay for quality. However, if you want to give great food away for free, I'll take it.

    September 2, 2010 at 3:52 pm |
  28. John

    Once word gets out on this "payment method" I bet the number not paying at all will increase dramatically as people who would never both to stop and pay for something there will go out of their way to grab it for free.

    It's to bad, my wife loves some of their stuff and she'll miss it once they've gone bankrupt.

    September 2, 2010 at 3:47 pm |
  29. Cieje Valentine

    I don't like their stuff nearly enough to drive across town and waste my gas.. Even if the meal was free. Goodluck to PB though.. They'll need it.

    September 2, 2010 at 3:47 pm |
  30. Mark Downs

    Either the CEO is one of those sickeningly sunny optimists, or he wants to save money by not hiring cashiers or not investing in POS machines. Doesn't matter, either it lasts only 1 month max, or Panini files for Chapter 7.

    September 2, 2010 at 3:46 pm |
  31. me

    I, personally, would over pay so that someone who needs it can eat. Yes, there are those who will under pay, because they don't know how much to pay, and there are those scum who will not pay at all, when they can afford it.

    September 2, 2010 at 3:26 pm |
  32. Leah (TXanimal)

    The majority of the votes are "I'd pay what I owe". Right. Who here paid the sticker price for their car? Exactly.

    September 2, 2010 at 3:05 pm |
    • Texas Pete

      I bought my car at an auction. They are way cheaper that way, especially these last couple of years.

      September 2, 2010 at 4:39 pm |
    • Artemis

      Not quite the same.
      There are many things that are considered "negotiable" in price in addition to cars (tips at restaurants, yard sales, professional services, etc). It's just that we don't usually think of a comodity like food as a negotiable option. Other places are also taking on this philosophy and refering to them as "donation serivces:" its a way for people to get services at what they can afford from people willing to give because they believe in the concept of "giving back." While this may be a shocking concept to the political or social conservative, there really are some people who believe there's more to life than just taking what you can from others, and to hell with them.

      September 2, 2010 at 8:01 pm |
      • Leah (TXanimal)

        My point is: people SAY they'll pay what they owe because it looks noble, when in fact, I'd be willing to bet that most people would probably pay what they THINK it's worth, much like buying a car. The issue was with the poll itself, not the issue of negotiable v. non-negotiable commodities.

        September 3, 2010 at 11:27 am |
  33. Reality

    Take it for free and don't feel bad. This is a stupid idea. If a company is dumb enough to give me their product for free, I will take it for free. Feel bad for the company or the employees? No. I'm not the one who instituted the stupid headline-grabbing policy. Lose enough money and they will change back QUICKLY.

    September 2, 2010 at 2:59 pm |
    • SurRy

      That's ok. This left-coast, liberal, communist, socialist, left-wing, marxist, elitist would overpay so you could eat for free : )

      September 3, 2010 at 1:38 am |
  34. Truth

    Definitely socialism. Let's hose the middle class, and let the slackers get a free ride. Obamacare anyone?
    And for the record, Panera is a very liberal company, so this should not be a surprise to anyone.

    September 2, 2010 at 2:56 pm |
    • Umm

      Wow

      September 2, 2010 at 3:49 pm |
    • JP

      @Truth, you missed a couple words in your name, like "My version of the" and I think what you meant to say was "I don't actually know what middle class is but I'm going to pretend I do on the internet to attempt to derail a food blog with politics."

      Political blog is -> that way.

      Or did they disable comments cause they were tired of your bigotry?

      September 2, 2010 at 6:28 pm |
  35. good system

    If they told me how much the item cost, I'd pay what I'd owe. If not, I'd pay what I think the value of the item is. That might be to their detriment, because I know that the cost of food items are pretty low in most cases. So they might charge $5 on a sandwich when it only cost $1 to make. (This is just an example, not actual costs.) So in that case, I'd probably pay them 50% to 100% more than what I think the item costs – $2, and hope they're still making a profit off of it.

    I wish movie theatres would let us do this. I would love to be able to stop paying $6 for a 50 cent drink and $4 for 10 cents worth of popcorn kernels.

    September 2, 2010 at 2:50 pm |
    • Chris

      $6 for a drink and $4 for popcorn!?!?! MAN ! I would LOVE to only pay that much... it's $7 for a medium drink and $10 for a medium popcorn around here....

      September 2, 2010 at 3:54 pm |
    • Richard

      "So they might charge $5 on a sandwich when it only cost $1 to make."

      You have confused materials used with the actual cost to make. Every sandwich costs include the ingredients, the labor, the rent, air conditioning, insurance for the building, most likely a franchise fee, advertising, recipe development and so on. A $5 sandwich really does cost a lot closer to $5 than $1 when the total busines is included. This is part of the reason that many businesses fail, they see a $3 cup of coffe and think it means $2.50 in profit...

      September 2, 2010 at 5:49 pm |
      • Steve

        I don't care what their overhead costs are. If it costs them $3 to bring a $1 product to market, they need to become more efficient. The whole point of the restaurant industry is to provide a product for less than it would cost you, yourself, to make. Why is it that I can get a hot, fresh white-meat chicken sandwich for $2.89 at Chik-Fil-A but a peanut butter and jelly sandwich at Panera costs $3.79? It's either inefficiency or ridiculous markups, and I don't care for either.

        September 3, 2010 at 4:30 am |
      • Tom Rankles

        Steve says, "The whole point of the restaurant industry is to provide a product for less than it would cost you, yourself, to make." Wow. I wonder why people bother putting kitchens in their homes.

        September 3, 2010 at 8:38 am |
      • Michele Hays

        Richard, have you ever worked for a national chain? It's not as though the chain can't figure out what total costs are involved in each individual sandwich; they have whole rooms full of people to keep those costs as low as possible. I doubt sincerely that the cost-per-sandwich is as inflated as you've stated.

        More to the point, if Panera has that information, why aren't they sharing it?

        September 3, 2010 at 11:53 am |
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