Family Dollar Agrees To Stop Overcharging Customers, In $400,000 Settlement

Another dollar store chain is paying the price, for allegedly making its customers pay an inaccurate price.

15 months after suing Family Dollar for listing “false prices on items” by displaying one price at the shelf but charging a higher price at the register, Ohio’s Attorney General has announced an agreement to settle the dispute. Family Dollar will pay $400,000 in fees and penalties, and take steps to ensure such pricing discrepancies don’t happen again.

Attorney General Dave Yost filed suit back in November 2022, after every Family Dollar store in one Ohio county failed a routine pricing audit. Investigators said the worst offender had a pricing error rate of 84%, meaning more than four out of every five items checked by the auditors rang up at a price higher than the one displayed at the shelf.

“We want a court order to make them stop doing this and to put adequate controls in place so that the price you see on the shelf is the price that they charge at the register,” Yost said at the time.

Now, the settlement that the two sides have agreed to, aims to accomplish just that.

Without admitting wrongdoing, Family Dollar has agreed to implement more rigorous employee training and more thorough internal price checks, to ensure that shoppers in the state of Ohio are charged accurately for their purchases. When price tags are created, “no less than two people shall check that the intended shelf tag price matches the intended charged price,” the settlement reads. Family Dollar will provide adequate time and staffing levels for employees to switch out price tags when pricing changes are made. And stores must display signs explaining that any shopper who discovers a price discrepancy will be charged the lower price and the store must immediately fix the discrepancy.

Stores must also conduct thorough, regular price audits. At least once a month, a store manager must conduct a random price check of at least 50 items. Once every two months, a district manager will conduct an additional random price check. And county-level auditors will continue conducting price checks of their own. If a store has a pricing “fail rate” greater than 2%, Family Dollar’s corporate office will be informed. If it happens twice within six months, the store must double its rate of internal price checks. And if it happens three times, the store must check every single price of every item on every shelf to ensure that every price is correct.

Family Dollar has also agreed to pay $400,000 to the state – a $50,000 civil penalty, a $100,000 payment to reimburse the state for investigative costs and fees, and $250,000 that will go to food banks across Ohio. It’s a similar agreement that the state reached with Dollar General in a similar price-discrepancy case last fall, in which $750,000 of a million-dollar settlement was earmarked for food banks.

The goal of sending the bulk of the settlement funds to food banks is “to try to make it right with the communities that shop at Family Dollar,” Attorney General Yost explained. Food banks across the state, he said, are “uniformly excited and appreciate the fact that we’re recognizing that they’re serving the same people that we’re trying to help with this legal process and the settlement.”

As for Family Dollar, it denied willful violations of state law, but said it agreed to settle in order to put the issue behind it. “We are committed to operational compliance with all applicable federal, state and local laws,” a Family Dollar spokesperson said in a statement, adding that the retailer is “dedicated to serving the needs of our shoppers and providing them with great values and pricing accuracy on the products they need and want.”

Since the lawsuit was filed in the state of Ohio, the settlement only applies to Family Dollar stores in Ohio. So Yost can’t speak for shoppers in other states. But “I want Ohio to have a fair marketplace where everybody can walk into the store and know that they’re going to have the same experience, the same fair dealing, that everybody else enjoys,” he said. “That’s at the fundamental base of what consumer protection is all about.”

So out of the 48 states where Family Dollar has stores, this settlement should ensure that prices at the shelf match the prices at the register in at least one of them. But if you shop at a Family Dollar store in one of the other 47 states – keep a close eye on the prices you pay, just to be safe.

Image source: Family Dollar