Family Dollar to Pay $63 Million in National Price-Transparency Settlement
The proposed order would require a $40 million consumer redress fund, a $20 million customer discount program and an independently assessed pricing accuracy program.
CHICAGO – Attorney General Kwame Raoul, along with the Federal Trade Commission and a bipartisan coalition of 16 other states, secured a $63 million settlement with Family Dollar Stores (Family Dollar), to resolve allegations that the company routinely charged customers more at the register than the prices displayed on shelves, price tags and advertisements.
In a proposed order [link], filed by the FTC, Raoul and the other state partners, Family Dollar will be prohibited from misrepresenting the price of its goods or services and required to establish and implement a pricing accuracy program that is independently assessed and annually certified.
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“Family Dollar overcharging for products at a time when many basic necessities have become less affordable harms vulnerable families and communities,” Raoul said. “I am pleased with this settlement that holds Family Dollar accountable and takes steps to ensure that it will not overcharge consumers in the future. I remain committed to protecting Illinois consumers from unfair business practices.”
According to the coalition’s complaint, Family Dollar has generated millions of dollars by charging more at the register than the prices it advertises. Raoul and the coalition allege that thousands of Family Dollar stores nationwide have overcharged shoppers, while failing to correct the issue despite thousands of failed inspections, hundreds of consumer complaints and multiple enforcement actions. The complaint alleges that consumers across the country have consistently reported widespread pricing discrepancies, and regulatory inspections have confirmed that price labels are inaccurate in stores across the nation where Family Dollar frequently charged consumers more at the register. The complaint further alleges that Family Dollar charged consumers more at the register than the prices listed on its website and mobile app.
Under the proposed order, Family Dollar will be required to establish a $40 million consumer redress fund payable to eligible consumers and a $20 million discount program for Family Dollar customers. Payments exceeding $3 million will also be made to the states, including $188,548 to Illinois. Family Dollar must notify customers of their redress fund eligibility by clearly posting notices in its stores and on its digital platforms. In addition, it must establish a pricing accuracy program aimed at ensuring that Family Dollar regularly monitors and verifies its prices, trains employees to identify pricing discrepancies and promptly corrects errors to ensure customers are charged the prices advertised or displayed.
Joining Raoul and the FTC, the enforcement action against Family Dollar are the attorneys general of Alabama, Arkansas, Colorado, Florida, Iowa, Kansas, Louisiana, Mississippi, Nebraska, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah and Wisconsin.
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