FTC, states sue Toast over fees

This lawsuit against Toast serves as a major warning for any retailer or service provider using integrated point-of-sale (POS) systems. The FTC and several states allege that Toast obscured the true cost of its services through hidden fees charged to both merchants and their end customers. For business owners, this highlights a growing regulatory intolerance for 'junk fees' and lack of transparency in payment processing contracts. If you offer financing or payment plans at the checkout, you need to audit your fee disclosures immediately. The regulators are targeting systems that add service charges or processing fees that weren't clearly agreed upon upfront. In Toast's case, the government argues that a $0.99 fee added to online orders was deceptive. For a merchant, this means the 'low rates' promised by a POS provider might be offset by hidden costs that frustrate your customers and create legal liability for your brand. This case signals that the government is looking past the software providers and focusing on how these fees impact the actual consumer experience at the register. Operators should review their merchant agreements to ensure they aren't being forced into fee structures that could lead to consumer complaints or regulatory scrutiny. Transparency in your checkout flow is no longer just a best practice; it is a legal necessity to avoid being caught in the next sweep of enforcement actions.

Source: Payments Dive

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