Toast payment process starts adding 99 cent charge to guest's bill that are over $10

[lorodoes]

Summary

The restaurant payment processing company Toast has now started adding a 99 cent charge to all charges over $10 that are processed by the payment processor. This appears as a 99 cent Processing Fee on the receipt that the restaurant hands to the guest. Locations that are taxed on meals will also be expected to pay taxes on the 99 cent charge as well that Toast pulls straight from their account. The 99 cent charge is supposed to be used for research and development. All of this started after partnering with Google, it was trialed the past few months and went in to affect on Monday at any location that uses Toast.

 

Quotes

Quote

 "My contention is that it’s absolutely unethical and illegal. And if it’s not illegal, it should be." — Missouri bakery owner Matt Wilhelmson

 

"To help fund ongoing innovation in restaurant technology, we are updating our pricing model to add a nominal $0.99 fee (this is not a surcharge) paid by guest." — Toast Inc.

 

My thoughts

The unfortunate bit about all of this is that Toast/Strip/Braintree/<payment processor> has these businesses by the short and curlies. It is very difficult to replace a payment processor. Not to mention a payment processor that also provides your POS and probably inventory management too. This is going to hurt those small businesses as the only way to stop this is to not use any business that uses Toast until Toast/Google relents and backs off this 99 cent charge that is going to cause problems for their real customers (the businesses). I wouldn't be surprised also that in some jurisdictions that this might be completely illegal as the guest wasn't made aware of this before siting down to eat or placing their order. Hopefully the FTC will step in and tell them to knock it off.

 

Sources

https://www.foxbusiness.com/lifestyle/restaurateurs-fuming-ominous-new-fee-billed-customers-big-tech-vendor

https://www.restaurantbusinessonline.com/technology/toast-adds-99-cent-fee-customers-who-order-online

https://www.paymentsdive.com/news/toast-adds-99-cent-customer-online-ordering-fee/653839/

https://www.nrn.com/news/toast-adding-99-cent-fee-all-orders-over-10

[IkeaGnome]

4 minutes ago, lorodoes said:

the only way to stop this is to not use any business that uses Toast until Toast/Google relents and backs off this 99 cent charge that is going to cause problems for their real customers

That will also run those small businesses out of business. Friendly reminder that cash is still a thing. 

[lorodoes]

3 minutes ago, IkeaGnome said:

That will also run those small businesses out of business. Friendly reminder that cash is still a thing. 

That too.

[Senzelian]

37 minutes ago, lorodoes said:

that are processed by the payment processor

Am I the only one that is confused by this sentence? Isn't anyone that's processing a payment a payment processor?

[Taf the Ghost]

As Right to Repair is slowly working its way through political avenues across a number of countries, I find it unsurprising that we're seeing a culmination of a return to the reason "Trust Busting" happened. While there's very few, large scale actual "monopolies" (from a Legal and Realistic standpoint), the rise of Ecosystems has made segment monopolies. Along with Common Carrier law changes, I suspect we'll see (note: this is over about 20 years, it's a slow process) "Ecosystems" added into the Anti-Trust Laws. (I also have a feeling this change might be illegal in some States because it would be a contract change of enough nature it could be a breach. However, that'd be Civil in most instances and mean legal fights to defend. Which is a classic Abusive Monopoly tactic.)

 

Clover (Point of Sale system [not sure if they process[) did something similar-ish recently. Having seen a restaurant running their systems recently, and this taken into account, I have to assume the companies in this segment are all up to their ears in debt and on the verge of collapse. Why does this feel like an issue in the WeWork category where they "Blitzscaled" right into oblivion because there's a very specific upper limit on revenue in the space?

[GeoStellar]

I would have thought that research and development costs should be coming out of the subscription fees and hardware maintenance fees that the resturants are forced to pay.  Yes, absolutely the restaurant can turn around and pass these costs along to the customer in the forms of higher priced food and drinks, but this is not a cost that a vendor should be passing on to the third party (restaurant customer).  I don't mind helping a restaurant pay for their cost of business, I do mind paying a 3rd party software/hardware vendor who is doing nothing for me.

[dizmo]

I think it's important to point out some blatant errors in your post. 

• This is NOT, as you state, for every transaction. It's only for online orders. 
• This is common. Doordash, Skip, etc all do the same thing. 
• You also know the fee before you place the order if you look under fees, but I do think they need to make it more obvious. 

Interestingly business at restaurants who charged the fee went up approximately 13%. 10% on some orders seems excessive though, they should change their fee schedule to a percentage model. Not sure how that wasn't obvious from the get go. 

 

https://www.restaurantbusinessonline.com/technology/toast-adds-99-cent-fee-customers-who-order-online#:~:text=Toast said restaurants using the,and designed to increase sales.

[derr12]

On 7/11/2023 at 6:45 AM, Senzelian said:

Am I the only one that is confused by this sentence? Isn't anyone that's processing a payment a payment processor?

The payment processor is the company that takes the charges from your credit/debit machine and sends it to the companies account in a secure manner. sounds simple but it isn't simple enough where you can do it in house. 

[Senzelian]

12 minutes ago, derr12 said:

The payment processor is the company that takes the charges from your credit/debit machine and sends it to the companies account in a secure manner. sounds simple but it isn't simple enough where you can do it in house. 

Yeah I get that. I just meant that this sentence is fundamentally wrong:

 

"The restaurant payment processing company Toast has now started adding a 99 cent charge to all charges over $10 that are processed by the payment processor."

 

The part in red is completely useless, as obviously, they can't add charges to things that they don't have anything to do with.

That's like saying "The tire manufacturing company XYZ is raising prices ... of their own tires ... that they make" Like no shit, it's their own tires.

 

Sorry, just things I can't unsee...

[ToboRobot]

On 7/11/2023 at 9:08 AM, lorodoes said:

The 99 cent charge is supposed to be used for research and development.

That is very strange.

[TetraSky]

Any and all taxes on these 99¢ charges better be paid by Toast. They are the ones pocketing that money. If not, I would suggest the owners to sue Toast for it. It's theft at that point and probably tax fraud too. Even more so if the restaurant isn't the one adding this charge.

[jagdtigger]

One gets away with it....... (im faily certain they arent the 1st ones doing it but forget who was it)