topic Re: Toast App Chargebacks in Restaurant Operations

Toast App Chargebacks

Pizza914 — Sat, 27 Dec 2025 04:28:25 GMT

A couple of days ago I received a chargeback from a regular customer on an order dated 8/22/25 that was placed through Toast's app (toasttab.com). Because I was busy with the Christmas holiday I was going to give the customer a call over the weekend.

Tonight I received 6 more chargebacks, ALL FROM THE SAME CUSTOMER, all ordered on Toast's app. Some were deliveries, others were pickups. The chargeback claims "10.4 - Other Fraud – Card Absent Environment". This is obviously a scam by this customer, but shouldn't this be Toast's problem? It's their app! I can understand if I took the card over the phone, but she placed it online using Toast. Even if I win the disputes, I'm out $75 for all the chargebacks!

Any advice?

Re: Toast App Chargebacks

HRsea — Sat, 27 Dec 2025 04:50:19 GMT

Toast's online fraud protection is very weak, the chargeback disputes never to win. To avoid losses from chargebacks, I only accept online orders through third-party platforms, the restaurant will received the payment even in the event of guest chargebacks.

Re: Toast App Chargebacks

josh212 — Sat, 27 Dec 2025 11:28:04 GMT

First off, what’s up Westchester!

You’ve hit on the ultimate dilemma: the balance between security and customer friction. If we make ordering too restrictive (2FA, captchas, etc.), we lose legitimate sales. Even strict AVS (Address Verification) can be tricky, as people often order to their office or a friend’s house.

The Hard Truth: We are Responsible One thing every owner needs to realize is that we are ultimately responsible for these chargebacks. Even though the order is placed through Toast’s app (toasttab.com), it’s a "Card Not Present" (CNP) transaction. Even with an app-verified stored card, fraud can still happen, and the bank puts the liability on the merchant. You can't assume Toast will eat that cost just because it’s their platform.

Note: On 3rd-party apps (Uber/DD/Slice), those platforms usually take the hit for the chargeback since you’re already paying them a high commission, but for Toast direct orders, that's your money on the line.

How to Spot and Stop the Scam:

Document Everything: If it's a delivery, you need proof. Using a tool like Shipday is great for documenting the delivery with photos of the food at the address. If you have a photo and a GPS ping, you have a much better chance of winning a dispute.
Watch for "Red Flag" Area Codes: If the order comes in with a strange area code (not 914,845,917,929,347,646,201,332,516,212,203) take a second look and call as they usually are dummy numbers
Spot the "Dumb" Order: Scammers often get greedy. If the order looks nonsensical or "too big" for a standard ticket, pay attention. They’d probably get away with it if they just ordered a pizza, but they usually go overboard.
The Human Test: Train your staff to call the customer if an order feels "off." Ask them to confirm a billing detail like a zip code. Fraudsters usually crumble under pressure and will just hang up.
Zero Out Loyalty: This is a big one. If you identify a fraudulent order, immediately wipe their loyalty points. Don’t let them build up rewards for free food using a stolen card.
The Ban Hammer: Call Toast Support and ask them to ban the user from your restaurant and block their device ID. You should also report them to the 3rd-party apps; your report might be the final flag that gets them de-platformed for good.

Stay vigilant! It really comes down to us doing our due diligence to protect our bottom line.

Re: Toast App Chargebacks

HearthpizzeriaB — Wed, 31 Dec 2025 00:07:02 GMT

I didnt know that we could block device IDs. Thanks for the info

Re: Toast App Chargebacks

HearthpizzeriaB — Wed, 31 Dec 2025 00:09:34 GMT

I have been thinking about getting a ToastGo 3 to process payment upon delivery. With the new hand held having cellular data, I think this could be a viable method to get rid of the card not present environment.

Re: Toast App Chargebacks

josh212 — Wed, 31 Dec 2025 10:18:13 GMT

@HearthpizzeriaB The question to ask is how many Chargebacks from CNP through online orders. Would not allowing contactless deliveries and requiring your driver's having to do all of the payment transaction at the door not decrease productivity. What is the cost of two Toast GO's plus cellular service a year, (keep in mind these devices will be inadvertently taken home by mistake by one of your drivers (if this is not the case, please teach me your ways so I can never lose a pizza bag again) versus how much of an issue is the chargebacks at your location a year. (this is a general question as for me I have only lost 3 out of 10 chargebacks amounting to $150 in almost five years so for me the answer is no, for others this may be different)

Re: Toast App Chargebacks

HearthpizzeriaB — Wed, 31 Dec 2025 16:10:51 GMT

All very valid points. If I have 1 or 2 charge backs a year its a lot for me. It has been more of a preventative thought for me.

Re: Toast App Chargebacks

Sdaniel — Wed, 31 Dec 2025 19:36:28 GMT

I hope this is the case now, in the past Toast agents said there wasn't anything they could do to block customer with repeat chargebacks.

Re: Toast App Chargebacks

josh212 — Wed, 31 Dec 2025 19:42:43 GMT

@HearthpizzeriaB So It sounds like a way to prevent your drivers to not forget the 2L Soda or the side salad would be more beneficial as I am sure it is costing more than the chargebacks 😀

Re: Toast App Chargebacks

HearthpizzeriaB — Sat, 03 Jan 2026 16:18:30 GMT

My absolute dream would be that the go3 also tracked the drivers location and worked as a gps with optimized routing. I know there are 3rd party products that do that though.

Re: Toast App Chargebacks

josh212 — Sun, 04 Jan 2026 05:06:11 GMT

@HearthpizzeriaB You can do this all with Shipday here is an example of some completed orders

which completes in toast and closes the order and adds to shift review Shoot me a DM i can show you in detail

Re: Toast App Chargebacks

ashokr — Thu, 08 Jan 2026 06:12:44 GMT

That is sadly true. Even in a CHIP transaction and we have the customer signature Toast can't do anything because the laws are so one sided. I've been thinking something like this needs an action and the entire restaurant industry needs to come together. On a chip transaction if this is real fraud the customer bank should own it.

The challenge isn't a two way street, you can give something but its a fire and forget and there is absolutely no way to escalate. Several customer do take benefit.

Atleast a way to block those customer cards, or even the customer would be a great optin, but alas!

Re: Toast App Chargebacks

ashokr — Thu, 08 Jan 2026 06:14:13 GMT

Yep. The fee is big like 30% of sales. which is insane what the delivery platforms take. And the tip goes to the driver LOL.

Re: Toast App Chargebacks

LTY — Sat, 14 Feb 2026 13:25:47 GMT

This is so bogus stuff from toast. I take online orders thru their toast online platform, AND I require a photo ID upon pickup up of the food (both much match in name) and have yet to win a chargeback, EVER! Toast doesn’t care, they are happy to rack up the $15 on each chargeback.