Toast makes fee grab with new surcharge

Toast, the restaurant management software company that has been giving ISOs and their sales reps a lot of indigestion, is now raising the ire of restaurant owners, and their customers. That's because Toast just announced that those who place online orders of $10 or more with Toast clients will be charged an additional 99 cents – that's 99 cents over and above all other charges.

According to reporting that first appeared in the Boston Globe, the new "order processing fee" is being tested with select Toast client restaurants and will be rolled out nationwide beginning July 10.

In a mockup of the planned new Toast interface described by Nation's Restaurant News the new fee does not appear as a separate line item; instead, it is included as part of a line item called "taxes and fees," the news outlet reported. "Unless consumers expand the 'taxes and fees' subsection, they won't see the new 'order processing fee'."

Restaurants that use Toast typically agree to two-year contracts and pay monthly software fees ($110 plus $4 per employee for a basic plan). Plus, they shell out hardware costs that can exceed $1,000 per location, and payment processing fees (anywhere from 2.49 percent plus 15 cents to 3.50 percent plus 15 cents, depending on channel and how hardware cost apportioned).

Restauranteurs interviewed by the Boston Globe were outraged. One is quoted as saying Toast has "no right to get between me and my customer." Said another, "Nobody needs extra fees and certainly not hidden fees."

"It's a pure profit move," said Dustin Magaziner, CEO at Raleigh-based PayBright, in an email exchange with Green Sheet. "I think this is just the start of increasing fees and new fees with Toast."

Blowing up social media

The new Toast surcharge has riled folks on both sides of the Atlantic, as evidenced by a series of tweets retweeting the news.

"PSA: If you start noticing a new 99-cent fee on your order at restaurants that use ToastTab it's new and it wasn't the restaurants' idea, and as of now they have no way to opt out of it," tweeted a group claiming to represent Chicago bars.

"Going over the top and charging your customer's customers is wild," tweeted Rich Reising, an operations executive at Captain, a food tech company.

"PSA folks. ISVs that own the full payment stack can hold merchants and shoppers hostage," tweeted London-based payments executive Geoffrey Baraclough.

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