FTC and 20 States Sue Dollar General Over Alleged Register Overcharges

The Federal Trade Commission and 20 states sued Dollar General on Monday, accusing the discount chain of charging shoppers more at the register than the prices shown on its shelves, price tags and advertisements, Reuters reported.

The complaint, filed in the US District Court for the Middle District of Tennessee, says the company took part in long running deceptive pricing practices that cost consumers millions of dollars, according to the FTC. The agency lists the case as matter 2623006.

What the complaint alleges

According to the FTC, Dollar General routinely charged customers more at checkout than the prices displayed in its stores. The complaint alleges that the company mislabeled prices for years, overcharged consumers again and again, and failed to correct the problem despite extensive knowledge of it inside the company.

The FTC case summary says thousands of Dollar General stores took advantage of vulnerable shoppers by extracting millions of dollars in unlawful overcharges, with insufficient safeguards to prevent the practice. It says the company was made aware of the problem and still failed to put in place policies and practices that would adequately address it.

The claims in the complaint are allegations, and the case will now be decided in federal court.

The regulator states its case

"Dollar General 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," said Christopher Mufarrige, Director of the FTC Bureau of Consumer Protection, in the agency statement.

"The FTC's action underscores the agency's commitment to lowering costs for consumers by stopping deceptive pricing practices that harm Americans," Mufarrige said.

A chain built on low prices

Dollar General operates more than 21,000 stores across the United States. The FTC says the company markets itself as a low priced alternative to large discount and big box retailers, selling thousands of household items at low prices.

The agency says those low prices are critical to the company's low income and fixed income customers, the same shoppers the complaint says were charged more than the advertised price.

The 20 states in the case

The states joining the FTC in the lawsuit are Alabama, Arizona, Arkansas, California, Connecticut, Florida, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Tennessee, Utah and Wisconsin.