Toast is adding a new consumer-facing $0.99-cent fee to all online orders, without giving restaurants the option to opt out of the new fee, in an unpopular move that has caused restaurant operators to post letters and tweets of protest on social media. As first reported by The Boston Globe, the fee will be added to all online orders over $10 and will be beta-tested with a small group of restaurants before being rolled out nationwide on July 10.
According to a mockup of Toast’s interface, the .99-cent fee will not show up separately and will be instead part of a combined line called “taxes & fees” that already regularly shows up when customers place online orders. Unless consumers expand the “taxes and fees” subsection, they won’t see the new “order processing fee,” which, according to Toast, is intended to “help fund product investments” like SEO menus, customization, and chargeback coverage.
However, if President Biden passes what has become known as the Junk Fee Protection Act, hidden fees like this one from Toast or others from ticket-selling websites could be under fire.
“As we innovate, we remain committed to keeping restaurant digital ordering costs low and protecting restaurant bottom lines from third-party commission fees,” a representative from Toast told NRN in an emailed statement. “We also take any changes to our pricing model at Toast very seriously. That is why to help fund ongoing innovation in restaurant technology, we are updating our pricing model to add a nominal $0.99 fee paid by guests on orders $10 and over on Toast online ordering channels. This change helps fund product investments and continued innovation in support of helping restaurants maintain the direct relationship with their guests.”
Despite the care Toast says it has taken in rolling out the new fee, the POS system’s restaurant customers are not happy, according to several posts on Twitter and LinkedIn.
In a LinkedIn post, Gardy Desrouleaux, owner and partner at Craft Food Halls in Boston posted a letter of protestation sent to Toast, calling the .99-cent fee “disrespectful and unhospitable.”
“You are not a B2C company, you are a B2B company,” Desrouleaux said in his letter. “In other words, our guests choose to do business with us and we choose to do business with you. It is unfathomable that it would be decided to forcibly tack on a fee to already impacted consumers. It is with vigor and great urgency that I, on behalf of our restaurant communities and loyal guests, implore you to move from this unorthodox business practice.”
When asked about the response to negative feedback from their operator customers, Toast said that “customer feedback during product development has been incredibly valuable and will continue to be.”
Contact Joanna Fantozzi at [email protected]