The Federal Trade Commission and 20 states sued Dollar General on Monday, accusing the off-price retailer of charging customers more for its products than it advertises.
The FTC said the chain, which operates 21,000 stores nationwide, allegedly mismarked prices and “illegally charged millions of dollars in fees” over the years.
“Dollar General betrayed the trust of millions of American consumers and caused significant economic harm to communities and consumers who were already struggling to keep their wages afloat,” Christopher Mufarich, director of the FTC’s Bureau of Consumer Protection, said in a statement.
The FTC added that American consumers rely on Dollar General’s advertised low prices to make ends meet on tight budgets, and prices that don’t match the advertised deals leave them unable to manage their household finances.
The agency filed the lawsuit in the U.S. District Court for the Middle District of Tennessee, Dollar General’s home state.
“Our goal is 100 percent accuracy between the shelf price and the price at the register in every store,” Dollar General said in a statement. “Like other retailers, despite our policies and procedures, occasionally price discrepancies do occur. When this happens, our store teams are guided, empowered, and expected to serve customers correctly. In recent years, we have continued to improve our pricing processes,”
Dollar General said it was informed of the FTC investigation in early February.
“Inaccurate pricing”
According to the lawsuit, thousands of Dollar General stores illegally overcharged shoppers.
Dollar General “has engaged in deceptive conduct for many years, harming the consumers it purports to serve,” the FTC and states said in the lawsuit. “Despite Dollar General’s promises of convenience, low prices and value, the company often charges customers at the checkout counter more than what’s shown on shelves, price tags and ads. This pattern of inaccurate pricing has gone on for years, affecting millions of purchases across the country.”
The company has also faced thousands of consumer complaints alleging that it failed to adhere to advertised prices at checkout, suggesting Dollar General intentionally harmed customers, according to the FTC.
The lawsuit seeks a permanent injunction as well as monetary and other relief.
“FTC staff also requested an amount that was unaffected by the pricing discrepancy and was greater than any actual assessment,” Dollar General said in a statement.
The company said it was “working diligently and in good faith to resolve this matter without litigation,” including “alternative ways of calculating the scope of a potential settlement that we believe are more reasonable.”
“While we respect the role of the Federal Trade Commission in protecting American consumers and the role of state representatives in protecting the citizens of their respective states, we will vigorously defend this lawsuit,” the statement read.
The Federal Trade Commission has filed unfair pricing charges against Dollar General, while other retailers have faced scrutiny for how they charge shoppers. Consumer advocates say retailers are developing new artificial intelligence technology that could be used for charging Consumer prices vary.
The Groundwork Collaborative, a nonprofit think tank focused on economic policy, led an investigation into the grocery shopping platform Instacart and found that in trials, the platform used artificial intelligence to simultaneously show customers Different prices for the same product From the same store.