Dollar General is being sued by several states and federal regulators over alleged "deceptive pricing," marking the latest instance in which the bargain retail giant has faced scrutiny and potential financial penalties over its marketing practices.
On Monday, 20 states and the Federal Trade Commission (FTC)—the chief agency in charge of consumer protections and fair business practices—sued Dollar General for a "long-running" campaign of mislabelling prices and overcharging customers. Dollar General, which runs over 21,000 stores in the U.S., has allegedly "taken advantage of vulnerable shoppers by extracting millions of dollars in unlawful overcharges with insufficient safeguards to prevent the practice."
And one consumer protection expert who spoke to Newsweek said that the company could now be facing "sizable penalties" as a result, given the number of states involved in the suit and the supposed scale of its offenses.
When approached for comment, Dollar General directed Newsweek to a statement which said that "nothing could be further from the truth" than the allegations contained in the complaint, and that it had been given insufficient time and information to respond to these but nevertheless "engaged cooperatively" with regulators to avoid litigation.
"As with other retailers and despite our policies and procedures, occasional price discrepancies can occur," it said. "When that happens, our store teams are instructed, empowered, and expected to make things right for the customer."
Newsweek has also contacted FTC for further comment.
Why Is Dollar General Being Sued?
According to the 95-page complaint, Dollar General has "for years engaged in deceptive conduct that harms the very consumers it claims to serve."
"Although Dollar General promises convenience, low prices, and value, the company has routinely charged customers more at the register than the prices displayed on shelves, price tags, and advertisements," it read. "This pattern of inaccurate pricing has persisted for years and affects millions of purchases across the country."
The complaint called the scale of its pricing misconduct "staggering."
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"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," Director of the FTC’s Bureau of Consumer Protection Christopher Mufarrige said on Monday. "The FTC’s action underscores the agency’s commitment to lowering costs for consumers by stopping deceptive pricing practices that harm Americans."
According to the FTC, Dollar General has also faced thousands of complaints from consumers "who say the company did not honor the advertised price."
In response, Dollar General said that its goal is "100 percent accuracy between shelf and register prices in every store," and that details surrounding the FTC investigation had been poorly communicated since it first became aware of this in February.
How Much Will This Cost Dollar General?
Joining the FTC in its lawsuit are Alabama, Arizona, Arkansas, California, Connecticut, Florida, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Tennessee, Utah and Wisconsin.
The lawsuit is targeting a permanent injunction as well as monetary relief, though it does not list the exact financial penalty to which Dollar General could be subject. It notes, however, that Dollar General entered seven settlements with six states between 2019 and 2026 over alleged inaccurate pricing, eventually paying over $6 million in penalties. The new federal-state suit covers a nationwide scope over several years, indicating that the monetary penalty could be significantly higher.
"This is a straightforward, old-school consumer fraud claim. Nothing complicated or nuanced," said Prentiss Cox, a professor of law at the University of Minnesota Law School.
Cox told Newsweek that while the FTC itself "has long had limited authority to issue civil penalties," it now has "broad authority" to return money to consumers—thanks to the Supreme Court decision in AMG Capital Management, LLC v. FTC—and the states will be "be able to impose sizable penalties to more than deprive [Dollar General] of its alleged ill-gotten gain."
Cox said the difficulties involved with consumer restitution—returning a "very small amount of money" to millions of customers—makes civil penalties more likely.
Dollar General’s Settlement History
"Despite being made aware of the problem, Dollar General has failed to implement policies and practices to adequately address the problem," the FTC said in Monday’s announcement.
And the lawsuit follows a number of similar state-level cases in recent years.
In December, the company agreed to pay $15 million to settle a lawsuit which alleged that it was charging customers more than the displayed prices. This came the same month it signed a $1.5 million settlement with Pennsylvania over similar allegations of overcharging customers.
In mid-October, Dollar General settled with the state of New York for $1.9 million, after an investigation by the office of the state’s attorney general which revealed "that Dollar General routinely overcharged customers for items sold in its stores."
However, the company has said it will be fighting the latest multistate efforts.
"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," it said on Monday.
Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here. Contact Newsweek editors for this story: Robert Greenall and John Fitzpatrick