Family Dollar Stores Inc. signage is displayed outside a store location in Mansfield, Texas, U.S., on Tuesday, Jan. 7, 2014. Family Dollar Stores Inc. is expected to release quarterly earnings results on Jan. 9. Photographer: Ben Torres/Bloomberg vi
Family Dollar has reached a $63 million settlement with the Federal Trade Commission and 17 states over allegations of deceptive pricing, with millions of dollars going back to eligible customers through repayments and discounts.
The two sides reached a settlement in federal court in Norfolk, Virginia Thursday. According to the settlement, the retailer will offer $40 million of restitution and $20 million of future discounts to eligible shoppers, in addition to paying $3 million to 17 states.
What we know:
The lawsuit accused Family Dollar of overcharging customers since 2023, violating federal and state laws against deceptive practices. According to the complaint, shoppers routinely paid more at the register than the prices advertised on store shelves, in weekly circulars, and on the retailer’s website and mobile app.
Dig deeper:
The complaint alleged that Family Dollar failed to correct pricing discrepancies despite repeated consumer reports and continued to advertise inaccurate prices. State and local regulators have cited the retailer for thousands of pricing violations, resulting in more than $3 million in fines.
The FTC filed the complaint alongside Alabama, Arkansas, Colorado, Florida, Iowa, Illinois, Kansas, Louisiana, Mississippi, Nebraska, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah and Wisconsin.
What they're saying:
"The FTC is committed to ensuring price transparency and fairness so consumers can make informed choices," said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. "Today’s order will ensure Family Dollar stops deceiving consumers about its prices and returns money to consumers harmed by these practices."
What's next:
Under the settlement, Family Dollar must notify eligible shoppers by prominently posting notices in stores and on its digital platforms. The retailer must also establish a "pricing accuracy" program to monitor prices, train employees to identify discrepancies and correct errors.
The Source: This story was written with information provided by Reuters, the Federal Trade Commission and the Complaint filed in the United States District Court Eastern District of Virginia. This story was reported from Orlando.