Beleaguered American consumers are getting toasted by Big Tech with a brazen new fee on food.
And restaurateurs who are being blamed by their customers for the added cost are fed up and angry.
“People are freaking out. Business owners are freaking out,” Tony Naser, who owns four pizza shops in Massachusetts and New Hampshire, told Fox News Digital.
Toast Inc., a powerful cloud-based third-party point-of-sale vendor used by more than 85,000 restaurants, is unilaterally adding a 99-cent “processing fee” to online orders of $10 or more.
The fee is being charged to consumers — not to the restaurants that are paying Toast for its services.
Toast is then lifting the fee for itself, its clients say — paid for by consumers who, in most cases, never heard of Toast, let alone agreed to do business with them.
“Toast did us dirty,” fumed one Toast customer on the company’s own client forum.
The fee is being added even to orders placed through restaurants’ own websites.
“People are freaking out. Business owners are freaking out.” — New England pizza shop owner Tony Naser
The business owners have no control over the charge — and must learn the hard way that they’ve ceded control over their sales mechanism to Big Brother.
“My contention is that it’s absolutely unethical and illegal. And if it’s not illegal, it should be,” Matt Wilhelmson, who owns Koehn Bakery in Butler, Missouri, told Fox News Digital.
“It’s no different than a cashier charging the customer $12 for an $11 item and pocketing the dollar for himself.”
U.S. Rep. Mark Alford (R-Missouri), who met with Wilhelmson on Monday, told Fox News Digital, “It’s very concerning on its face,”
“I’m very concerned not only for the retailers but for the consumers. If there’s any financial malfeasance that needs to be dealt with, I’ll be in contact with members of the (House) Financial Services Committee to get their attention on this,” Alford also said.
When consumers order a pizza online, or pay a bill at a steakhouse, point-of-sale companies such as Toast process the sale for client companies.
Point-of-sale vendors typically provide a variety of other record-keeping services in the process.
Those clients pay Toast a monthly fee for the service. Toast is also paid a percentage fee on every credit card sale.
Toast began testing the new 99-cent fee on restaurant customers in various locations around the country after it partnered with Google in February.
It was scheduled to roll out the feature nationally on Monday.
“We are thrilled to collaborate with Google to help Toast customers maximize their online presence and take control of their ordering channels,” Aman Narang, COO and co-founder of Toast, said in a statement in February.
Toast’s partnership with Google and the new fee on clients’ customers comes at a time when the 12-year-old Boston-based point-of-sale vendor appears in financial distress.
The publicly traded company suffered a net loss of $275 million in 2022, according to its SEC filings, and is on pace to fare worse in 2023, with an $81-million loss in the first quarter.
“My contention is that it’s absolutely unethical and illegal. And if it’s not illegal, it should be.” — Missouri bakery owner Matt Wilhelmson
The charge from Toast appears as a line item on receipts under the term “order processing fee.”
The receipt includes a note at the end, added without input from the shop owner: “The Order Processing Fee is set by Toast to help provide affordable digital ordering services for local restaurants.”
In states with a meals tax, the Toast fee is included in the taxable bill.
Restaurants will be forced to show the fee as income, even though the money is lifted out of their bank accounts by Toast.
The outrage quickly spilled over onto Toast’s own client message forums.
“’Order Processing Fee’ is a bogus, unethical and a very bad business practice on the part of Toast,” fumed one restaurant client on a post.
“How can you punish a customer for ordering from us?? And you are doing it in our name!”
“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 guests.” — Toast Inc.
Toast has claimed this is for the good of all involved.
Toast even boldly states that it’s using the money to fund its own research and development.
“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 guests on orders $10 and over on Toast online ordering channels,” Toast said in a statement provided to Fox News Digital.
“This change helps fund product investments, such as those highlighted above, and continued innovation in support of helping restaurants maintain the direct relationship with their guests.”
“The politest way I can put this is that it’s a back-door way to steal from restaurants,” said restaurateur Trent Patterson of Five12 Restaurant Concepts in Houston, Texas.
He calls the $1 fee on each transaction “preposterous.”
The 99-cent charge is a 10% percent fee on a small order such as a $10 pizza.
Patterson passed on the opportunity to use Toast as his point-of-sale system years ago, when he said the sales pitch “sounded too good to be true.”
The fee appears to be an attempt to pad company coffers, say industry experts.
“The politest way I can put this is that it’s a back-door way to steal from restaurants.” — Houston restaurateur Trent Patterson
“If their business model is unprofitable they need to change their contracts with future customers or exit their agreements with legal action with existing customers and charge more money,” said Patterson.
“These are my customers. Why are you charging my customers?” Massachusetts restaurateur Elias Khoury asked of Toast in an interview with Fox News Digital.
“I already pay them a lot of money. Charge me. Don’t charge my customer.”
Added Khoury, “Today it’s 99 cents. Tomorrow it could be $2 or $3. It’s at their discretion. We have no control over it.”