FIRST ON FOX: Raise a toast to the little guy. At least for now.
America’s beleaguered mom-and-pop eateries scored a victory on Wednesday when Big Tech point-of-sale vendor Toast Inc. rescinded its surprise fees on diners that it added remotely to customer receipts without the consent of its client restaurants.
The fees were lifted out of client bank accounts by Toast and placed in its own coffers, according to business owners.
The scandal ignited nationwide outrage in the restaurant industry, inspired a congressional inquiry and fueled threats of class-action lawsuits.
SUDDEN NEW FEES CHARGED TO MILLIONS OF AMERICANS BY BIG TECH VENDOR TOAST SPARK CONGRESSIONAL QUERY
Toast abused its cloud-based high-tech capabilities in what amounted to a "hijacking" and a "hostile takeover" of thousands of restaurants’ point-of-sale systems, operators told FOX Business.
"While we had the best of intentions — to keep costs low for our customers — that is not how the change was perceived by some of you," Toast CEO Chris Comparato wrote in part in an email to thousands of its clients nationwide, copies of which were forwarded to FOX Business.
"We made the wrong decision and following a careful review, including the additional feedback we received, the fee will be removed from our Toast digital ordering channels," the email also said.
The email's subject read as follows: "Removing the Order Processing Fee - A message from our CEO."
FOX Business made several outreaches to Toast for comment about the company's removal of the fees. A response was not received by time of publication.
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Last Tuesday, FOX Business reported on the fee scandal the day after Toast rolled out the controversial new fee program nationally — sparking a congressional inquiry within 48 hours.
"Today’s decision from Toast is a huge win for businesses and individuals all across America," Rep. Mark Alford, R-Missouri, told FOX Business on Wednesday.
"The removal of this fee sends a signal about how public pressure can make a real difference."
The mea culpa, however, from the once-trendy 12-year-old Boston-based point-of-sale and credit-card processing provider appears to have done little to smooth over the incredible trail of distrust Toast created among its 85,000 restaurant clients
"I feel like [Toast] showed us that we can’t trust them to be a business partner," Matt Wilhelmson, who owns Koehn Bakery in Butler, Missouri, told FOX Business.
"I don’t feel like in any way, shape or form that this response puts any more trust from me in them."
Wilhelmson pointed out "that they’re not returning anybody's money."
Anger at Toast started percolating in February.
The company, after announcing a new partnership with Google, began to leverage its access to the point-of-sale systems of thousands of client restaurants around the nation to charge diners 99 cents for online orders of $10 or more.
The charges were remotely added to receipts by Toast without the consent of restaurateurs — yet they appeared as if they were line-item restaurant charges.
"Toast did us dirty," fumed one Toast customer on the company's own client forum.
The charges on American diners came on top of the monthly fees and credit-card processing fees client that restaurants pay Toast for its services — up to several thousand dollars per month, according to operators.
"I’m happy they’re finally doing the right thing," restaurateur Elizabeth Van Wie, whose family owns Zookz Sandwiches in Phoenix, Arizona, told FOX Business.
"But we’re still exploring our options," she said, meaning for other vendors. "We’re frustrated. We feel stabbed in the back. Toast still leaves a very bad taste in my mouth."
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Consumers who were sick of ever-mounting fees on traditional services responded angrily to the charges, naturally assuming restaurants were padding the tab.
"We had no control over it," one Texas restaurateur told FOX Business.
Adding insult to injury: Diners had to pay meal taxes on added Toast fees while restaurants had to report the money that was taken by Toast as their own taxable income.
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"I think we rattled their cages," Tony Naser, who owns pizza shops in Massachusetts and New Hampshire, said of the nationwide revolt against Toast.
But he, too, is still left seething that the company even instituted charges on his customers without his consent in the first place.
"How can you trust them to make good ethical business decisions?" said Naser.
"This is f----- up how they ever made this decision in the first place," he also said.
"What businessman decides to charge customers who are not their own?"
Naser said he is also looking at other vendors as options for his business.
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The email from Toast from its CEO to clients finished with, "I’d like to close by thanking you for your input and support of Toast. We can accomplish far more together than we can apart and we remain committed to supporting your restaurant and the industry well into the future."
