FTC sues Dollar General over alleged price deception
The FTC sues Dollar General for alleged price deception, citing over 29,000 complaints of register prices exceeding displayed amounts.
The Federal Trade Commission (FTC) and 20 U.S. states have filed a lawsuit against Dollar General, accusing the discount retailer of deceptive pricing practices. The agency alleges that Dollar General has been charging customers more at the register than the prices displayed on tags and in advertisements.
According to the FTC’s complaint, Dollar General has received over 29,000 complaints regarding price discrepancies between January 2023 and the end of March this year. An undercover investigation by the FTC in Ohio, Pennsylvania, Missouri, and Maryland found that every purchase resulted in higher register prices than advertised.
In one instance, an undercover purchase on Jan. 16 at a Dollar General store in Ohio resulted in 13 out of 58 items acquired having a different price than that listed on a product label or shelf. The FTC notes that Dollar General’s quick moving register screens make it difficult for consumers to catch such inconsistencies at the moment.
Despite being aware of the issue through consumer complaints and failed pricing inspections, Dollar General has not implemented adequate policies to address the problem, the FTC stated in its press release.
The lawsuit claims that Dollar General’s actions violate the FTC Act, the Gramm-Leach-Bliley Act, and various state laws. Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said, “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.”
Dollar General’s financial performance contrasts with these allegations. The company reported a 5.2% year-over-year increase in Q2 net sales, reaching $11.3 billion, as higher-income shoppers increasingly turn to the chain. CEO Todd Vasos highlighted the company’s stronghold in rural areas during an August earnings call, stating, “Our mature store base is a unique competitive advantage that enables us to serve customers in smaller, rural communities across the country.”
The FTC’s complaint includes partially redacted internal emails and communications from Dollar General, further supporting the allegations. The agency emphasizes that the retailer’s conduct harms the very consumers it claims to serve, despite promises of convenience and low prices.
