On October 29, the Federal Trade Commission sued Toast, one of the largest POS providers for small and midsize restaurants. Seven state attorneys general and the people of California joined the case. The complaint alleges hidden fees, add-ons restaurants never ordered, cancellation roadblocks, and a “24/7 support” promise that did not hold up. Toast denies the allegations and says it will fight in court.
At QSS, we install and support POS systems and merchant services every day. Whatever the court decides, this case is a useful audit of how POS deals get sold and how they go wrong. Here is what the complaint says and what to check in your own contract.
What the Complaint Alleges
The suit was filed in federal court in Northern California. It makes four main claims.
Hidden costs. Toast markets a $0/month “Pay-as-you-Go” plan with free hardware and software. The complaint says the cost moves into a higher processing fee. It also says the $0 price covers one terminal, even though the offer is advertised to restaurants with one or two. That detail sits in small type at the bottom of the page.
Unwanted add-ons. The complaint says restaurants report being enrolled in services they did not sign up for, sometimes after asking to cancel them.
Hard cancellations. It describes cancelling as a multi-step process that requires help from several Toast departments.
Support that does not answer. Toast’s website promises 24/7 support from real people. The complaint includes accounts from more than a dozen customers who say they could not reach anyone for weeks or months.
The suit also raises a 99-cent online ordering fee that Toast charged diners from September 2021 to June 2023. It says restaurants were not told about that fee in their contracts. Toast dropped it in 2023 after backlash from restaurants.
The government wants a court order stopping the practices, plus damages and civil penalties.
Toast’s Response
Toast says it has worked with the FTC since mid-2025 to resolve the claims outside court. It says the FTC ignored evidence that restaurant customers negotiate their contracts. It also argues that the Restore Online Shoppers’ Confidence Act, which the FTC is applying, does not cover contracts between businesses.
These are allegations. A court has not ruled.
Why the Money Model Matters
Look at where POS revenue comes from. Toast generated more than $6 billion in 2025. More than 80% came from financial services such as payment processing and business loans. The software is often not the main product. The processing rate is.
That is not unusual or improper by itself. It does change how you should shop. A restaurant that compares monthly software prices and skips the processing rate is comparing the wrong number.
A “free” terminal that carries a higher rate is not free. You pay for it on every check, every tip, and every online order. Restaurants run on thin margins and high transaction counts. A small difference in rate, applied to every ticket, adds up over a year.
Multi-terminal setups raise the stakes. A bar, a kitchen printer station, a host stand, a handheld, and a kiosk all count. If the advertised price covers one terminal, every additional one changes your math.
Six Checks Before You Sign or Renew
1. Get every rate in writing. Ask for the full structure: interchange-plus or flat rate, monthly fees, PCI fees, statement fees, and batch fees. Ask what can change the rate and when.
2. Count what the price covers. Confirm how many terminals, handhelds, and kiosks are included. Read the fine print on each one.
3. List every add-on. Know each service you pay for, from online ordering to marketing to payroll. Require your signature before anything is added.
4. Read the exit terms. Find the term length, auto-renewal, notice period, early termination fee, and equipment buyout. Ask who you call to cancel and how long it takes.
5. Put support in the contract. A website promise is marketing. A contract term is enforceable. Get response times in writing. Test the support line before you sign. Restaurants run nights, weekends, and holidays, so call at 9 p.m. on a Saturday and see who answers.
6. Control fees charged to your guests. The 99-cent fee landed on diners under the restaurant’s name. Ask whether your vendor can add a guest-facing charge without your approval.
Audit What You Already Have
Pull your last three processing statements. Compare every line to your contract. Flag any fee you cannot trace to a signed term. Ask your provider to explain it in writing. Repeat this every quarter.
Check your add-ons too. Log into your account and list every active service. Cancel what you do not use, and get the cancellation confirmed in writing.
If you use Toast, review your contract and statements now. If you use another vendor, run the same checks. The lawsuit names one company, but the checklist works for all of them.
Bottom Line
Do not switch vendors because of a complaint. Do not ignore it either. Treat the case as a free checklist for your own contract. Hidden fees, bundled add-ons, hard exits, and thin support are four places to look. Check each one.
QSS provides POS, merchant services, and IT managed services to businesses in New Jersey and New York City. If you want a second read on your contract or processing statements, contact us.