The Federal Trade Commission and 20 states are suing Dollar General over alleged "deceptive" pricing practices, claiming the discount retailer repeatedly charged customers more at checkout than advertised prices.
The lawsuit, filed Monday in federal court in Tennessee, alleges Dollar General’s pricing practices cost consumers millions of dollars over several years, despite tens of thousands of complaints and the company’s knowledge of the problem.
"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," Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said.
Newsweek has reached out to Dollar General for comment.
Which States Are Suing Dollar General?
The 20 states joining the FTC are: Alabama, Arizona, Arkansas, California, Connecticut, Florida, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Tennessee, Utah and Wisconsin.
What Does the Lawsuit Allege?
According to the FTC's complaint, Dollar General repeatedly mislabeled prices and charged customers more at checkout than the prices displayed on shelves, price tags and advertisements.
"Dollar General has taken advantage of vulnerable shoppers and has extracted millions of dollars in unlawful overcharges," the complaint alleges.
The complaint also alleges the company received "tens of thousands" of consumer complaints about price discrepancies but failed to implement adequate safeguards to prevent overcharges.
The FTC and the states allege Dollar General’s practices violate federal and state laws. The states further allege the company’s claims constitute "unlawful, unfair and/or deceptive practices" prohibited under state law.
How Many Dollar General Locations Are There?
Dollar General operates more than 21,000 stores nationwide and markets itself as a low-cost option for shoppers.
The complaint alleges that Dollar General primarily serves low- and fixed-income households, with households earning $35,000 or less accounting for 60% of its revenue. The company sells about 2,000 items for $1 or less, which the complaint says customers rely on to manage tight budgets and maintain financial stability.
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How Shoppers Could Be Impacted
The lawsuit alleges Dollar General's pricing practices have cost consumers millions of dollars in overcharges.
The FTC and the 20 states are seeking a permanent injunction, monetary relief and other remedies, including restitution and civil penalties under state laws.
However, the complaint does not specify a total amount to be returned to consumers or guarantee individual refunds. Any payments to shoppers would depend on the outcome of the case and the relief ultimately ordered by the court.
The allegations have not been proven in court. The case will be decided by the court.
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 Steven Frank