Toast Is As Bad As 3rd Party Delivery Co’s: Why Is Toast Refusing to Share Customer Data?

Toast refused comment for this article.

Without a doubt the largest complaint of the third party delivery (3PD) companies is their unwillingness to share data. Sure, some of the larger restaurant chains have negotiated data access, but this is not the case for the vast majority of 3PD customers. And it’s a real problem.

As COVID has made clear, ecommerce is no longer only relegated to retailers, and restaurants are needing to adapt. This means that restaurants need to start building a unified view of their customer across in-store and offline purchases, and ultimately use this repository of unified data in their marketing efforts. (Executing marketing efforts takes some data science so we don’t want to put the cart before the horse, but let’s just focus on getting a good repository of customer data to start with).

But if you use Toast POS, guess what? You’re not going to like the answer.

Merchants are horrible at understanding total costs of ownership and too-often neglect to consider the following things when making a POS purchase decision (which, for the record, is literally the most important technology purchase decision a merchant can make):

• Locked-in payments models
• Hidden processing margins via flat rating
• Steep integration fees that drastically increase the cost of using third party tools,
• And now, courtesy of Toast, we can add an inability to use certain third party tools altogether, though we think this will expand to encompass most third party tools, or at least it will be financially punitive to use a non-Toast product

Instead, merchants settle for whatever’s shiniest or “free” because, you know, valuable things in life are free, right?

We feel like Herodotus here, a Greek historian who famously said,

Of all men’s miseries the bitterest is this: to know so much and to have control over nothing.

Herodotus

Because we predicted exactly this type of malicious behavior from cloud POS companies like Toast all the way back in April of 2017. Yes, four f*cking years ago we could have told you precisely where Toast would be today: trying to monopolize the stack and drastically increasing costs for customers to ensure customers turn to Toast whenever possible, even if Toast’s solution is a festering boil of fecally-laced vomit by comparison.

Toast has refused to share customer data with its merchants that need this data for their marketing tools. Even larger merchants that count 10’s of locations under Toast are finding this incredibly problematic.

We use a third party tool for our loyalty and CRM. Toast is not willing to share customer data with us so we can unify the data in our third party tool. Accordingly we’re starting to look at alternative POS solutions that don’t take such a patriarchal stance.

Anonymous Toast customer

We’ve heard the same thing from third party loyalty/CRM companies.

Toast uses Worldpay for their processing. Traditionally whenever we had an account that used Worldpay we would get the payment token data – which has cardholder names and partial card numbers – from Worldpay. But we can’t get any of that from Toast. We’ve talked with Worldpay, where we have a good relationship, and they’ve said their hands are tied.

Toast offers to send us their own payment token, but it doesn’t contain any identifiable cardholder data, so we can’t unify that customer with other systems, like online ordering or Facebook.

We all know Toast has their own CRM and this makes it impossible for a Toast customer to use any third party marketing tool like ours; it’s entirely intentional and there’s no way it’s rooted in any privacy or technical matter.

Anonymous third party

We also logged into the Toast portal for a few Toast customers to verify this ourselves – see screenshot below: you cannot populate cardholder names.

When we asked Toast’s support about access to customer data they said, “We can’t share it due to privacy concerns.” Except we have never had a problem getting customer data from literally any other payments provider, including in Canada, where PIPEDA mandates much tighter privacy laws.

It’s beginning to sound like an orchestrated lie to us…

We only found one instance where a Toast customer was getting this data, and it was actually coming through a third party that had a large account behind them to push this. But even then that third party shared that this wasn’t the case for all their mutual Toast customers, implying that data sharing might be based loosely around the size of the merchant – ie larger customers get preferential treatment.

Sound eerily similar to the 3PDs?

The only other POS company where there’s been issue in extracting cardholder data is with Aloha, and that’s because their gateway (EDC) encrypts data and failure to make this data available is more a function of incompetence than malfeasance or avarice. (BTW you would get cardholder data for an Aloha site from the processor.)

Why would Toast behave in such a way? Well, we think we already know the answer:

Toast wants to own the entire merchant stack. If a Toast customer wants to use any non-Toast product, Toast wants to make it as financially punitive as possible.

Aside from logic and elementary deductive reasoning based on observing Toast’s actions, how would one come to this conclusions? Two things.

First, Toast has stated that they want to earn $16,000 in ARR per merchant location. Uh, yea. $16,000. That’s a really hefty number. And if Toast can’t figure out enough products that earn that ARR you think they might just juice the revenue out of the payments stream? Surely a company that locks merchants into multi-year contracts wouldn’t gouge merchants on processing volume, right?

Then, of course, there’s Toast’s explicit proclamation that they’re building a CRM. It kinda makes sense that providing third parties access to customer data would make your CRM less competitive, no?

Based upon Toast’s stated desire to reach $16,000 of ARPU per merchant location we fully expect Toast to continue down this path, limiting access to information so a merchant’s only choice is to use a Toast solution. The we-told-you-so’s only look worse given that we’ve been saying this for four years now but hey, nobody every accused merchants of knowing how to read.