Family Dollar agrees to shell out $63 million for deceptive pricing

The agreement requires Family Dollar to pay $40 million for a redress fund, $20 million for discounts, and $3 million to be split among 17 states.NORFOLK, Va. (CN) —The Federal Trade Commission and 17 states announced a $63 million settlement with Family Dollar Thursday over claims of deceptive pricing.Family Dollar, previously a subsidiary of Virginia-based Dollar Tree before its sale to private equity firms last year, operates over 7,000 stores primarily in low-income rural and urban areas where it acts as some communities’ only accessible source for household needs. The FTC and the states sued under the FTC Act, the Gramm-Leach-Bliley Act and dozens of state laws. Part of the settlement requires Family Dollar to offer consumers $20 million in discounts and establish a $40 million redress fund for eligible customers. The 17 states agreed to split $3 million.Family Dollar has already entered into $800,000 worth of settlements with state attorneys general over claims that it changes the price consumers see on the shelf or website once they reach checkout.“For consumers living paycheck to paycheck, even a slight price increase at checkout can lead to real, adverse consequences,” the FTC and 17 states, including Alabama and Colorado, said in their complaint. “Despite serving consumers for whom affordability and accuracy are critical, Family Dollar has repeatedly charged higher prices at the register.”One consumer reported Family Dollar to the Better Business Bureau in 2023, claiming the store charged them full price for cereal that should have been discounted. Consumers from seven states reported Family Dollar in 2025 for refusing to honor a “2 for $20” sale for large diaper packages they saw on the company’s mobile app.“When you go to the store, you deserve to know exactly how much you are paying for something,” Colorado Attorney General Phil Weiser said in a statement. “When you budget for groceries and anticipate paying a certain shelf price, only for that amount to change at the register, this can greatly affect a consumer. When a business does this, we will hold them accountable.”State inspectors noticed large discrepancies between the listed price of products and the price charged at the register. Utah found Family Dollar has failed 47% of inspections for inaccurate price labels since 2023. One Utah store overcharged for 12 of 25 items the inspector purchased. In Cuyahoga County, Ohio, the Family Dollar stores failed over 83% of pricing inspections.The FTC and the states also noted Family Dollar has failed to address years of complaints over its mobile app. They offer examples of customers unable to use coupons from the mobile app because they malfunction at the register.The settlement requires Family Dollar to adopt a pricing accuracy program. Third-party assessors will conduct annual assessments for four years. Family Dollar must also post settlement notices at its stores and on its website.“Family Dollar has charged consumers more at the register than the prices it advertises — betraying the trust of millions of American consumers who rely on Family Dollar for essential household goods and necessities and imposing significant financial harm on the communities that can least afford it,” the FTC and the states said in their complaint.Other states, including New York, Massachusetts and North Carolina, have fined Family Dollar in the past. The settlement comes a few weeks after the FTC and 20 states sued Dollar General for inaccurate pricing.Family Dollar’s lawyer failed to respond to a request for comment.“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.”Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads