Retailer To Pay $63 Million To Settle Overcharging Claims In PA, Other States

PENNSYLVANIA — A discount retailer with hundreds of locations across the state will pay $63 million to settle a complaint accusing it of routinely charging customers more at registers than prices displayed on shelves, price tags and advertisements.

The Federal Trade Commission and 20 states, including Pennsylvania, filed the complaint against Family Dollar alleging the retailer's practices cost consumers millions of dollars.

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The proposed order, which was announced Thursday and still must be approved by a federal judge, bars Family Dollar from misrepresenting the price of its goods or services and mandates that the retailer establish and implement an independently assessed and annually certified pricing accuracy program.

"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."

The complaint alleged that thousands of Family Dollar stores have overcharged shoppers. Family Dollar also was accused of failing to correct the issue despite being warned about the problem.

The complain was filed after consumers across the country complained about widespread pricing discrepancies. In the past five years, Family Dollar has been cited for thousands of pricing violations, resulting in fines exceeding $3 million. In the past three years, Family Dollar has entered into multiple settlements with state Attorneys General and consumer protection agencies, paying over $800,000 in penalties for inaccurate pricing.

Family Dollar also allegedly charged more at the register than the prices listed on its website and mobile app. The complaint also alleged 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.

In a related complaint filed last month, the FTC and multiple states sued Dollar General Corporation for similar deceptive pricing accuracy practices, overcharging consumers and failing to correct the issue despite being warned about the problem.

The FTC litigation against Dollar General is ongoing.

Under the proposed order, Family Dollar will be required to establish a $40 million consumer redress fund payable for eligible consumers and a $20 million discount program for Family Dollar customers. Payments exceeding $3 million will also be made to the states.

Information on precisely how much money Pennsylvania will receive was not immediately available. According to the data site ScrapeHero,Dollar General has 255 locations across the state.

Family Dollar also must notify customers of their redress fund eligibility by clearly posting notices in its stores and on its digital platforms. Additionally, it must establish a pricing accuracy program, train employees to identify pricing discrepancies and promptly correct errors to ensure customers are charged the prices advertised or displayed.