Family Dollar in settlement with FTC, 17 states over unfair-pricing allegations
Family Dollar has reached a $63 million settlement with the Federal Trade Commission and 17 states over allegations that it routinely charged customers more at the register than the prices displayed on shelves, price tags and advertisements.
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 its customers. Payments exceeding $3 million will also be made to the states.
In addition, Family Dollar must establish a pricing accuracy program aimed at ensuring that it 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.
The settlement follows a complaint filed in October in which the FTC and 20 states sued Dollar General Corp., alleging that it charged customers more at the checkout than the prices it displayed elsewhere, The FTC’s litigation against Dollar General is ongoing.
Family Dollar
The complaint alleges that thousands of Family Dollar stores nationwide overcharged shoppers, including in low-income communities with limited access to full-service grocery stores, while failing to correct the issue despite being warned about the problem. It also alleges that Family Dollar failed to correct its deceptive pricing practices and continued to make false pricing statements, despite thousands of failed inspections, hundreds of consumer complaints and multiple enforcement actions.
Family Dollar also allegedly charged more at the register than the prices listed on its website and mobile app. The FTC said that consumers regularly reported that they did not receive the discounted prices shown on Family Dollar’s Smart Coupons, because the mobile application did not work and prevented customers from accessing and redeeming the coupons at the register.
Family Dollar’s internal records show that consumers have complained to the company for the last six years about the same problems, according to the FTC.
“The FTC is committed to ensuring price transparency and fairness so consumers can make informed choices,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Today’s order will ensure Family Dollar stops deceiving consumers about its prices and returns money to consumers harmed by these practices.”
