US regulator proposes $63 million Family Dollar settlement

Sole source: The Federal Trade Commission (FTC) says it and 17 states have proposed a $63 million settlement with Family Dollar over allegations that the retailer routinely charged more at checkout than the prices displayed on shelves, tags and advertisements.

The proposal follows years of pricing enforcement. The FTC said state and local regulators cited Family Dollar for thousands of pricing violations in the preceding five years, resulting in fines exceeding $3 million. The retailer also paid more than $800,000 in penalties under several state settlements in the preceding three years.

What the complaint alleges

The complaint alleges that thousands of Family Dollar stores nationwide overcharged shoppers, including in low-income communities with limited access to full-service grocery stores, and failed to fix the problem after warnings. It cites customer reports and regulatory inspections that found inaccurate labels and frequent higher prices at checkout.

The complaint also alleges that checkout prices exceeded those on Family Dollar’s website and app. Customers regularly said they could not access or redeem advertised Smart Coupons discounts because the app did not work, the FTC said. Its account says the company’s internal records showed customers had complained about the same app problems for six years.

Payments and price checks

The FTC says that under the proposed order, Family Dollar would establish a $40 million redress fund for eligible customers and a $20 million discount program for its customers. The FTC said more than $3 million would also go to the states. The retailer would have to post clear notices in stores and on its digital platforms about eligibility for redress.

The order would prohibit Family Dollar from misrepresenting prices and require it to regularly check prices, train employees to identify discrepancies and promptly correct errors. Its pricing-accuracy program would be independently assessed and certified annually.

The FTC filed the complaint and proposed order in the U.S. District Court for the Eastern District of Virginia. The order would have the force of law once a judge approves and signs it.