Technology

Toast adds a 99-cent fee for customers who order online

The fee on orders of $10 or more is intended to help Toast cover its own costs as it aims to become EBITDA profitable this year.
Toast
More than 85,000 restaurants use Toast. | Photo courtesy of Toast

Consumers frustrated by the seemingly endless stream of fees and surcharges in today’s economy won’t find any respite with Toast.

The big restaurant technology provider confirmed Wednesday that it is adding a 99-cent fee for online orders over $10 to help cover its own costs. 

The “order processing fee” is part of the company’s new online ordering system. Toast said the fee is designed to keep restaurants’ costs down while also funding “ongoing innovation in restaurant technology.” 

At checkout, the fee is included in a line item labeled "taxes and fees." It's described as: "Set by Toast to help provide affordable digital ordering services for local restaurants."

Toast fee

As for when restaurants and their customers might start seeing that fee, Toast said the rollout of the new system is "in progress."

The fee was first reported by The Boston Globe.

The fee will likely be unpopular with consumers, who will be paying even more for their food at a time when menu prices are already rising, and restaurants, which are not able to opt out of the additional charge.

Toast said restaurants using the updated system with the 99-cent fee saw a 13% average increase in the percentage of guests ordering online. That was at 450 restaurants during four 21-day periods from August through November 2022.

Toast said the new program is sleeker and designed to increase sales. It includes new features such as search engine-optimized menus and integration with Google ordering.

Boston-based Toast works with about 85,000 restaurants and generated revenue of more than $2.7 billion last year. But it has struggled to turn a profit, posting a net loss of $252 million last year and $81 million in the first quarter of 2023 alone.

It believes it can become profitable by at least one measure this year, forecasting a range of negative $10 million to positive $10 million in earnings before interest, depreciation and amortization (EBITDA).

Bringing in an extra 99 cents on many online transactions could help. 

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