FTC and 20 States Sue Dollar General Over Alleged Checkout Overcharges

The Federal Trade Commission and 20 states filed a lawsuit against Dollar General on Monday, alleging the discount retailer charged customers more at checkout than the prices it advertised.

The company runs 21,000 stores across the country. According to the FTC, it mislabeled prices for years and collected "millions of dollars in unlawful overcharges" as a result.

The complaint was filed in the U.S. District Court for the Middle District of Tennessee, the home state of Dollar General. It asks for a permanent injunction, along with monetary and other relief.

Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said the retailer "has betrayed the trust of millions of American consumers and imposed significant financial harm on communities and consumers who are already struggling to make their paychecks last." The agency added that shoppers on tight budgets rely on advertised low prices to get by, and that prices which do not match advertised deals make it impossible for them to manage household finances.

The suit says thousands of Dollar General stores unlawfully overcharged shoppers. It contends that the company promises convenience, low prices and value, yet routinely charged more at the register than the amounts shown on shelves, price tags and advertisements. The FTC and the states describe a pattern of inaccurate pricing that has lasted for years and touches millions of purchases nationwide.

The FTC also pointed to thousands of consumer complaints saying the chain did not honor advertised prices at checkout. In the agency's view, those complaints indicate that Dollar General knowingly harmed its customers.

Dollar General rejected the allegations in a statement. "Our goal is 100% accuracy between shelf and register prices in every store," the company said. It added that, as with other retailers and despite its policies and procedures, occasional price discrepancies can occur, and that store teams are instructed, empowered and expected to make things right for customers when they do. The company said it has strengthened its price-accuracy processes in recent years and remains committed to continuous improvement.

The retailer said it learned of the FTC's investigation in early February. It also said FTC staff demanded a monetary amount that was "untethered" to any realistic assessment of the sums tied to pricing discrepancies, and "orders of magnitude larger" than such an assessment. Dollar General said it worked in good faith to settle the matter without litigation, including by proposing what it called a more reasonable method of calculating potential settlement ranges.

While saying it respects the FTC's role and that of state officials in protecting consumers, the company said it will "defend this litigation vigorously."