The Federal Trade Commission and 20 states have sued Dollar General, alleging that the discount retailer charged customers more at checkout than the prices shown on shelves, tags, and advertisements.
The complaint alleges that pricing discrepancies at thousands of Dollar General stores led to millions of dollars in unlawful overcharges, and that the company lacked adequate safeguards to prevent them. Regulators also allege that Dollar General received tens of thousands of complaints from customers who were charged more than advertised but failed to adopt policies to address the issue.
Dollar General disputes the allegations, saying it strives for complete accuracy between shelf and register prices and has strengthened its pricing procedures in recent years. The company said it would defend itself against the lawsuit while remaining open to settlement discussions.
Dollar General shares fell about 4% after the FTC announced the lawsuit on Monday.
“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’s Bureau of Consumer Protection.
The states joining the FTC are Alabama, Arizona, Arkansas, California, Connecticut, Florida, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Tennessee, Utah, and Wisconsin.
In its response, Dollar General rejected the suggestion that it had disregarded customers’ affordability needs. The company said that, despite its policies and procedures, occasional pricing discrepancies can occur, and store teams are instructed and empowered to correct them for customers.
“Our goal is 100% accuracy between shelf and register prices in every store,” Dollar General said. “In recent years, we have enhanced our price-accuracy processes and remain committed to continuous improvement.”
The retailer said it learned of the FTC investigation in early February through a civil investigative demand dated January 30. It said it cooperated with the agency, producing more than 200,000 documents and over 350 gigabytes of data and making company representatives available to provide sworn testimony.
Dollar General said FTC staff sent it a draft complaint and settlement order on September 23, three days after testimony ended. The retailer said the agency’s monetary demand far exceeded a realistic estimate of amounts associated with pricing discrepancies.
The company said it spent the next four weeks trying to resolve the matter, agreed to many of the FTC’s requested nonmonetary undertakings, and proposed an alternative way to calculate potential settlement ranges. It also disputed the agency’s calculation of consumer redress and its interpretation of the Gramm-Leach-Bliley Act as grounds for monetary recovery.
Dollar General said the FTC filed the lawsuit without responding to its monetary counteroffer, and that it first learned 20 states had joined the case when the suit was filed.
The retailer said it remains open to discussions to resolve the matter. It also emphasized its role in serving communities, noting that its stores are within five miles of approximately 75% of the U.S. population.
"Although we respect the FTC’s role in protecting American consumers and the State representatives’ role in protecting the citizens of their respective states, we will defend this litigation vigorously," Dollar General said in a statement. "We remain ready and willing to engage in reasonable, meaningful discussions to resolve this matter while keeping our focus on what has always been at the heart of Dollar General – serving our customers and the communities we call home. That commitment has not changed and will not change as we navigate this matter."
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