Family Dollar has agreed to pay $63 million to settle allegations that it routinely overcharged customers, the Federal Trade Commission and 17 U.S. states announced. The FTC and the states accused the budget retailer of failing to honor prices displayed on store shelves, price tags and in advertisements. Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said the settlement would "ensure Family Dollar stops deceiving consumers about its prices and returns money to consumers harmed by these practices."
The FTC and state regulators alleged that pricing inaccuracies were widespread across Family Dollar's operations and that the company failed to correct errors. Customers regularly reported being charged higher prices at the register than those displayed on price tags, in stores, on the retailer's website and in its mobile app. The complaint involved 17 states: Alabama, Arkansas, Colorado, Florida, Iowa, Illinois, Kansas, Louisiana, Mississippi, Nebraska, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah and Wisconsin.
Family Dollar operates more than 7,000 stores across 48 U.S. states and Washington, D.C. The Chesapeake, Virginia-based company did not immediately respond to requests for comment on the settlement. The settlement includes a proposed order banning Family Dollar from misleading customers on prices and requiring the company to adopt a "pricing accuracy program" that will be independently assessed and certified annually.
The settlement establishes a $40 million fund to compensate eligible customers who made purchases at Family Dollar stores from January 1, 2023, to October 1, 2026. The retailer will notify customers of their eligibility for reimbursement through in-store notices and online. An additional $20 million discount program will require Family Dollar to offer customers 15% off a range of goods for two days. The 17 state plaintiffs will receive $3 million to be divided among them.
Family Dollar must establish a pricing accuracy program requiring regular monitoring and verification of prices and employee training to identify and correct pricing discrepancies. This settlement follows an October action by the FTC and 20 states against Dollar General over similar deceptive pricing allegations, with that litigation still ongoing.
For shoppers at Family Dollar, the settlement means the retailer must now verify prices match what is displayed, with customers harmed by overcharging between January 2023 and October 2026 eligible for compensation from a dedicated $40 million fund.