Family Dollar to pay $63M after FTC says it overcharged customers
Family Dollar has agreed to pay $63 million to settle allegations that it routinely overcharged customers by millions of dollars through deceptive pricing practices.
The Federal Trade Commission and 17 U.S. states accused the Chesapeake, Virginia-based company of failing to honor prices displayed on store shelves, price tags and in advertisements. Family Dollar operates more than 7,000 stores across 48 U.S. states and Washington, D.C.
Pricing inaccuracies
The FTC and states' complaint alleged that pricing errors were widespread at Family Dollar stores and that the retailer failed to correct them. Customers regularly reported being charged higher prices at the register than those displayed on goods' price tags, in stores, on the retailer's website and in its mobile app.
Today's order will ensure Family Dollar stops deceiving consumers about its prices and returns money to consumers harmed by these practices.
Customer compensation
The proposed order requires Family Dollar to establish a $40 million fund to compensate eligible customers who made purchases from Jan. 1, 2023, to Oct. 1, 2026. The retailer will notify customers of their eligibility through in-store notices and online.
A separate $20 million discount program will offer customers 15% off a range of goods for two days. State plaintiffs will receive $3 million to be divided among them.
Future compliance
The settlement bans Family Dollar from misleading customers on prices and requires the company to implement a "pricing accuracy program" that is independently assessed and certified annually. The retailer must train employees to identify and correct pricing discrepancies.
In October, the FTC and 20 states sued another discount retailer, Dollar General, over similar deceptive pricing practices. That litigation is ongoing.
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