FTC and 20 states sue Dollar General over checkout pricing

By Elena Vasquez

The Federal Trade Commission and 20 U.S. states sued Dollar General on Monday over alleged deceptive pricing after every undercover purchase produced a higher register price. The FTC said Dollar General had received more than 29,000 price-honoring complaints, meaning complaints about differences between advertised and checkout prices, from January 2023 through the end of March this year.

Dollar General did not immediately respond to Retail Dive’s request for comment.

Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said on Monday:

“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.”

What did the undercover investigation find?

The FTC said investigators made purchases from January through April at Dollar General stores in Ohio, Pennsylvania, Missouri, and Maryland, and every transaction produced a register price above the advertised price. The FTC complaint says a Jan. 16 purchase at an Ohio store included 13 of 58 items priced differently from the product label or shelf.

The FTC alleges Dollar General has often charged more at registers than prices listed in printed circulars, digital channels and in-store displays. Its complaint says the retailer’s quick-moving register screens make the discrepancies difficult for shoppers to catch at the moment.

The FTC said thousands of consumer complaints and failed pricing inspections had already made the company aware of the alleged inconsistencies. Despite that notice, Dollar General “has failed to implement policies and practices to adequately address the problem,” the agency said in its Monday press release.

Which laws does the lawsuit target?

The FTC complaint also contains partially redacted internal Dollar General emails and company communications, and it outlines consumer complaints about different register prices alongside details of the undercover investigation. The FTC and the states allege Dollar General’s conduct violates the FTC Act, the Gramm-Leach-Bliley Act and state laws.

The complaint states:

“Dollar General has for years engaged in deceptive conduct that harms the very consumers it claims to serve.”

The complaint also says:

“Although Dollar General promises convenience, low prices, and value, the company has routinely charged customers more at the register than the price displayed on shelves, price tags, and advertisements.”

What does the case mean for the retailer?

Dollar General’s second-quarter (Q2) net sales rose 5.2% year over year to $11.3 billion, while higher-income shoppers increasingly shopped at the chain, according to Retail Dive. During an August earnings call, CEO Todd Vasos described the chain’s rural reach as a core part of the business.

“Our mature store base is a unique competitive advantage that enables us to serve customers in smaller, rural communities across the country,” Vasos told analysts.

For Dollar General, the case turns on whether it can implement the policies and practices the FTC says it failed to put in place. Without them, the gap between advertised prices and register prices will remain central to the 20-state lawsuit.