Toast is adding a 99-cent fee to all orders over $10
Hello there,
I’m Jeff, a restaurant consultant from Florida. And boy, I have some exciting news: Did you know that Toast is adding a 99-cent fee to all orders over $10?
A significant shift will occur in the online food ordering landscape, courtesy of Toast, the leading digital restaurant management platform.
From July 10, 2023, Toast will introduce a new 99-cent fee on all orders exceeding $10. This move is expected to shake up the industry, and it’s crucial to understand how this could impact you.
The “order processing fee” will be levied on orders placed through the Toast platform. The company states that this new initiative is designed to offset costs and fuel ongoing technological innovation within the restaurant industry.
Intriguingly, early testing with a select group of restaurants has indicated a 13% average boost in online orders, providing a silver lining to the impending rollout.
However, not everyone is welcoming this update with open arms. The Fee, tucked neatly into the taxes and fees line item at checkout, has prompted a wave of discontent among some customers and restaurant owners.
Critics argue that it’s a hidden charge, with some even questioning its legality under the proposed Junk Fee Protection Act, which aims to enforce greater transparency in online transactions.
Join us as we delve deeper into the implications of this additional cost, the backlash from customers and restaurateurs, and the potential legal hurdles it might encounter.
Stay tuned as we break down the good, the bad, and the uncertainty of Toast’s new 99-cent Fee.
Is Toast Adding a 99-Cent Fee to All Orders over $10
Yes, Toast is implementing a new policy whereby a 99-cent charge will be added to all orders above $10 via its online ordering system. The customers bear the responsibility of this Fee, formulated to assist Toast in defraying its expenses and continuing to drive advancements in restaurant technology.
During checkout, this additional cost can be found in the taxes and fees section and is labeled as an “order processing fee” imposed by Toast.
This charge is currently in its trial phase with a select number of restaurants, and a nationwide implementation is slated for July 10, 2023.
Restaurants that have adopted the new system with the 99-cent charge have reportedly experienced an average 13% upsurge in online orders.
However, the Fee hasn’t been well-received by all, with considerable pushback from restaurants and patrons.
Critics have voiced their grievances on platforms like social media, decrying the Fee as covert, unjust, and inconsiderate towards restaurants and their customers.
Moreover, there’s a concern that this charge may infringe on the proposed Junk Fee Protection Act, legislation that advocates for more openness and disclosure of online transaction fees.
Is there an option for restaurants to forego the 99-cent Fee?
Regrettably, Toast has confirmed that restaurants have no choice but to comply with the 99-cent Fee. It is a compulsory charge for all restaurants that utilize its online ordering services, and there is no room for negotiation.
According to Toast, the Fee plays a vital role in maintaining minimal digital ordering costs for restaurants and safeguarding their profitability against the commission fees from third-party providers.
Specific customers have expressed discontent, voicing their intention to uninstall the Toast app or place orders directly with the restaurants.
How can one navigate Toast’s new 99-cent Fee for orders over $10?
From a customers point of view
As a customer or restaurant owner wishing to dodge the 99-cent Fee, there are several approaches you might consider:
- If it’s an available service, directly placing your order with the restaurant via phone call or walk-in could bypass this charge.
- If the restaurant is featured there, consider shifting to an alternative online ordering platform like Grubhub, Uber Eats, or DoorDash. Be aware, however, these platforms might impose specific fees or commissions that could impact the restaurant or yourself as a customer.
- Another strategy is placing orders valued under $10 through Toast, as the Fee is only applicable for orders exceeding this amount. Although, this may not be a practical or satisfying solution for most.
From a restaurant owner’s point of view
As a restaurant owner looking to evade the 99-cent Fee, the options are somewhat more limited:
- You could consider transitioning to another POS system that doesn’t impose such a fee, such as Square, Clover, or NCR Aloha. Be prepared, though, as this could entail additional hardware, software, staff training, and system integration costs. Plus, you may lose some of the features and benefits unique to Toast.
- Reach out to Toast to communicate your concerns and feedback regarding the Fee. You could join forces with other restaurant owners challenging the Fee and collectively request that Toast reconsider or rescind it.
Do bear in mind; however, there’s no certainty that Toast will heed these concerns or amend its policy.
Do restaurants have the option to transfer the 99-cent Fee to their customers?
Regrettably, the answer is no. Restaurants are not allowed to shift the burden of the 99-cent Fee onto their customers.
The cost is already built into the total of online orders made through Toast-affiliated restaurants.
Although this charge is hidden in the small print, it is distinctly marked as a payment that goes to Toast to back its sustained endeavors in enhancing its restaurant services.
Restaurants have no authority over the imposition of this Fee. They cannot opt out, negotiate removal, or alter it with Toast.
Furthermore, they receive no part of the Fee nor derive any direct benefits from it.
The main aim of the charge is to support Toast in managing its operational costs and investing in the ongoing development of restaurant technology.
How has Toast addressed the controversy surrounding the 99-cent Fee?
In response to the furor over the new Fee, Toast has defended its decision by asserting that the charge enables them to drive continuous innovation for their user base, mitigate hefty commissions imposed on restaurants, and maintain lower patron costs than other online food ordering platforms.
Furthermore, Toast has introduced the Fee as part of an upgraded online ordering system, which is more streamlined and intended to enhance sales.
They highlight that establishments utilizing this revamped system with the additional 99-cent Fee have observed a mean increase of 13% in customers placing orders online.
Understanding Toast’s Fee Structure
Toast doesn’t levy commissions on orders or demand any upfront fees for its POS software.
However, it does impose standard ‘card-not-present’ payment processing fees applicable upon making a sale, the rates of which fluctuate depending on your chosen plan and transaction volume.
Furthermore, Toast applies a 99-cent fee, shouldered by guests, on orders exceeding $10 through Toast online ordering channels.
This charge is directed towards bolstering product investments and fostering innovation to help restaurants sustain a direct connection with their patrons.
Here’s a rundown of Toast’s payment processing fees:
Toast’s Payment Processing Fees
| Toast’s Payment Processing Fees | Details |
|---|---|
| Quick Start Bundle | A charge of 2.49% + $0.15 is levied per transaction |
| Core | This plan attracts a fee of 2.49% + $0.15 for each transaction |
| Growth | The transaction fee remains consistent at 2.49% + $0.15 |
| Build Your Own | Pricing is customized based on individual requirements |
Toast’s 99-Cent Fee
| Toast’s 99-cent Fee | Explanation |
|---|---|
| Applicability | This fee applies to orders totaling $10 and above via Toast online ordering channels |
| Checkout Details | Customers bear this fee, which is included in the ‘taxes and fees’ section during checkout |
| Fee Labelling | It’s designated as an ‘order processing fee’ by Toast |
| Restaurant Obligation | All restaurants using Toast online ordering channels must apply this fee |
| Negotiability | This fee is set and cannot be negotiated or opted out of by restaurants |
How can one tell whether a restaurant uses Toast online ordering?
To ascertain whether a restaurant employs Toast for its online ordering needs, one of the primary methods is to seek out the Toast logo or name displayed on the restaurant’s website or app.
Another resource is the Toast Takeout app, which lists restaurants using Toast’s online ordering channels arranged near your current location.
However, remember that this list may not be exhaustive, as it requires restaurants to opt-in for inclusion.
Alternatively, inquire directly with the restaurant’s staff or management. They should be capable of providing information about whether they use Toast and the features they access through the platform.
Furthermore, perusing online reviews or testimonials by fellow customers or restaurant owners who have experienced using Toast can offer insights into their experiences and perspectives.
These methods will aid you in determining whether a restaurant leverages Toast for online ordering.
Conclusion: Toast is adding a 99-cent fee to all orders over $10
As we close this exploration of Toast’s new 99-cent Fee, it’s evident that reactions vary widely. As a frequent user of online ordering platforms, I understand both sides of the argument.
On the one hand, introducing additional fees can feel like an unexpected bump in the road.
On the other, as a technophile, I appreciate that innovation often comes with a price tag, and maintaining the technology that makes online ordering possible isn’t free.
Like any other industry, restaurants need to change as new technologies emerge and consumer tastes shift.
Toast is trying to bridge the gap by keeping its services affordable for restaurants while maintaining and improving their offerings. Only time will tell whether the 99-cent Fee will be a sustainable approach to achieving this balance.
We, as consumers, have the power to voice our concerns, offer feedback, and ultimately decide where we spend our money.
It’s an exciting time for the restaurant industry, with many lessons to learn. And as a customer, it’s fascinating to watch these developments unfold.
Jeff Smith is a Restaurant Consultant with over 20 years of hospitality experience ranging from server to owner and general manager. He focuses on Restaurant POS technology as well as restaurant marketing. Check out our world-famous restaurant resources page for a comprehensive offering of hand-picked resources and tools to help your business. You can also check out some of our other restaurant business articles.
