Another possibility is that the electrical outlet is old and worn. If the toaster is plugged into an outlet where the plug prongs don't fit tightly, then heat from arcing can occur right where the prongs meet the contacts in the outlet. This is more likely to happen with appliances which draw heavier current, such as the toaster or a hair dryer. If the outlet does seem old and loose then try another one and see if the plug prongs and cord stay cooler. Some warmth of the plug and cord is normal, but it shouldn't feel hot. If necessary, you can replace the outlet for minimal cost, if you understand how to do so (be very careful or consult an electrician if you're not sure). If the outlet is newer and still tight, and there's no visible damage as Damian suggested, then it could mean that Tracy's answer is correct, that the manufacturer used a smaller gauge cord than ideal.