Toast is the most popular restaurant POS in America — but popular doesn't always mean good. Here's what you need to know about the controversies before signing a contract.

The Toast POS Controversy Explained

Toast's 99¢ fee sparked congressional investigation and restaurant owner backlash

Toast currently holds about 25-30% of the US restaurant POS market — more than 85,000 locations. The technology is genuinely good: easy to use, feature-rich, and capable of handling everything a restaurant needs.

But in 2023, Toast made a decision that sparked outrage across the restaurant industry. They unilaterally added a 99¢ fee to any online order over $10 — charged directly to customers, not restaurants.

Neither the restaurant nor the customer agreed to this fee. It appeared on customer receipts without warning, making restaurants look like they were price gouging.

According to Fox Business, congressional leaders demanded answers from Toast after the policy went public. Representative Mark Alford from Missouri stated they were "going full steam ahead with investigating the propriety of their way of doing business."

How Toast Makes Money (And Why That Matters)

Understanding Toast's business model helps explain their pricing decisions

When you sign up with Toast, you must use their payment processing — a common requirement among modern POS systems. Toast makes money from:

• Transaction fees — 2.49% + 15¢ per transaction
• Hardware sales — Toast terminals and tablets
• Monthly subscriptions — Software fees for various features
• The controversial customer fees — The 99¢ online order surcharge

Here's where it gets concerning: Toast is losing money. In 2022, they lost $275 million. In the first quarter of 2023, they lost $81 million — on pace to lose over $320 million that year.

Toast claimed the fee helps fund "research and development." But when a company is hemorrhaging hundreds of millions annually, that explanation rings hollow to many restaurant owners.

The Hidden Contract Concerns

Many owners report hidden fees and stipulations not explained during sales

Beyond the customer fee controversy, restaurant owners have reported problems with Toast contracts that weren't disclosed during sales conversations:

Common Complaints

• Hidden processing fees beyond the advertised rates
• Contract stipulations discovered only after signing
• Difficulty canceling or switching systems
• Unexpected charges appearing on monthly statements

The pattern is concerning: what sounds like a straightforward deal during the sales pitch becomes complicated once you're locked in.

Why This Should Concern You

Restaurants have no control over fees Toast adds to customer transactions

The 99¢ fee issue isn't about the amount — it's about control. Toast demonstrated they can add fees to your customer transactions without your consent, and there's nothing you can do about it.

What if that fee increases to $2 or $3? Toast's actions show they're willing to:

1. Charge customers who never agreed to do business with Toast
2. Make changes unilaterally without restaurant input
3. Damage restaurant reputations by adding visible fees
4. Keep the money themselves while restaurants handle customer complaints

Additionally, restaurants must report the 99¢ fee as income — even though Toast takes the money. This means restaurants pay taxes on fees they never received. According to Nation's Restaurant News, this created significant accounting headaches for affected businesses.

Toast POS: The Actual Technology

The technology itself is excellent

To be fair, Toast's technology is excellent. If there were no contract concerns, it would rank among the best:

What Toast Does Well

• Intuitive interface — Staff learn it quickly
• Restaurant-specific features — Built for food service, not retail
• Reliable hardware — Purpose-built terminals
• Integrated payments — Everything in one system
• Online ordering — Native capability, no third parties needed

What Toast Doesn't Do Well

• Transparency — Hidden fees and contract terms
• Trust — Willingness to charge customers without consent
• Stability — Hemorrhaging money raises longevity questions
• Flexibility — Locked into Toast payment processing

Alternatives to Toast POS

Several competitors offer similar features without the contract controversy

If Toast's controversies concern you, consider these alternatives:

Square for Restaurants

• Free tier available — Start without monthly fees
• Transparent pricing — 2.6% + 10¢, no hidden charges
• Easy cancellation — No long-term contracts
• See our POS comparison guide

Lightspeed Restaurant

• Premium features — Advanced inventory and analytics
• Built-in QR ordering — Contactless dining support
• Multi-location — Scales with your business
• Pricing from $139/month

TouchBistro

• Hybrid system — Works offline if internet drops
• iPad-based — Uses hardware you may already have
• Flexible payments — Works with third-party processors
• Starting at $69/month

Fuudey for QR Ordering

If you want to add QR ordering to your existing POS without switching systems, Fuudey offers a free tier that integrates with most platforms. See our QR menu generator comparison for more options.

Should You Use Toast POS in 2026?

Is Toast right for your restaurant?

The decision depends on your risk tolerance:

Consider Toast If:

• You prioritize technology over contract terms
• You're comfortable with locked-in payment processing
• You trust Toast won't add future fees
• You've reviewed the full contract with a lawyer

Avoid Toast If:

• Transparency and control matter to you
• You've been burned by hidden fees before
• You want flexibility to switch payment processors
• You're concerned about fees appearing on customer receipts

Questions to Ask Toast Before Signing

Essential questions to ask before committing

If you're still considering Toast, demand answers to these questions in writing:

1. What fees can Toast add to customer transactions?
2. What contract terms aren't disclosed in the sales presentation?
3. What's the cancellation process and any associated fees?
4. How will I be notified of future price or policy changes?
5. What happens to my data if I leave Toast?

Get answers in writing before signing anything.

Frequently Asked Questions

Common questions about Toast POS and the fee controversy

Is Toast still charging the 99¢ fee?

Toast has faced ongoing pressure from restaurant owners and Congress regarding the fee. Check current policies directly with Toast and existing customers before committing.

Can I switch from Toast to another POS?

Yes, but the process varies. Some owners report difficulty exporting data or canceling contracts. Review your specific contract terms and cancellation clauses.

Is Toast POS going out of business?

Toast is a publicly traded company with substantial backing. However, their continued losses raise questions about future pricing changes to achieve profitability.

What's the best Toast alternative for small restaurants?

Square for Restaurants offers the best free option. For premium features, Lightspeed provides excellent value. See our full POS comparison.

Conclusion

Choose a POS system you can trust for the long term

Toast makes excellent POS technology — that's not in dispute. What's concerning is their willingness to add fees to customer transactions without restaurant consent, combined with reports of hidden contract terms.

Before signing with Toast, review the full contract with legal counsel, get fee policies in writing, and consider whether a competitor offers similar technology with better transparency.

For restaurants prioritizing control and transparent pricing, Square or Lightspeed may be safer choices — even if they lack some of Toast's restaurant-specific features.

Whatever you choose, don't sign based on a sales presentation alone. The right POS is a long-term partnership, and trust matters more than features.