A Tennessee company that bills itself as “America’s neighborhood general store” has been overcharging its customers for years, the Federal Trade Commission says.
The FTC, joined by 20 states, has filed a lawsuit against Dollar General in U.S. District Court in Middle Tennessee. The corporation is headquartered in Goodlettsville, Tenn.
The lawsuit says Dollar General has been overcharging its customers for years but refuses to change course. According to The Guardian, the company has faced more than $6 million in previous state attorney general settlements, including a $1.9 million settlement with New York. The FTC contends the alleged overcharging is made worse by the fact that Dollar General targets consumers who are already financially strapped.
“Dollar General has for years engaged in deceptive conduct that harms the very consumers it claims to serve,” the lawsuit stated.
“Although Dollar General promises convenience, low prices, and value, the company has routinely charged customers more at the register than the prices displayed on shelves, price tags, and advertisements,” the FTC stated. “This pattern of inaccurate pricing has persisted for years and affects millions of purchases across the country.”
Dollar General is one of the most profitable companies in America. It has 20,000 stores in 48 states and made more than $42 billion in net sales last year. The company intentionally targets rural communities and low-income urban neighborhoods. Eighty percent of its stores are located in towns with less than 20,000 residents, and households earning $35,000 or less make up 60 percent of its revenue.
Dollar General lures customers with low prices advertised weekly in its splashy circulars and in-store deals. But the FTC says those “deals” are often misleading.
Dollar General undeterred, FTC claims
The FTC alleges Dollar General routinely “charged more at the register than prices listed in its circulars … (and) the price listed on the shelf, the product or in the in-store sales offer.”
Customers don’t always catch the overcharge.
“When consumers check out, prices flash quickly on the screen and are difficult to track in the moment,” the FTC said. “In some Dollar General stores, the screen shown to consumers at checkout does not clearly display the price charged for each item.
“Some consumers do not discover pricing issues until after they have completed their purchase or after they return home, and some may never discover them at all,” the FTC said.
But even when customers discover the upcharge, the FTC says store employees insist they have no control over pricing or the ability to correct the error and tell customers to “call corporate,” the lawsuit stated.
Dollar General received more than 29,000 complaints of overcharges in just the past three years. State and federal investigators have documented pricing discrepancies in thousands of inspections, according to the FTC.
But none of that has stopped the practice at Dollar General stores across the nation, the FTC says.
“Despite repeated red flags, Dollar General has failed to correct the issue and continues to make false pricing statements,” the lawsuit stated.
The agency is now asking a federal judge to issue an injunction against the retailer and force it to turn over what the FTC alleges are ill-gotten gains.
‘Vulnerable shoppers’ targeted, lawsuit alleges
“The scope of Dollar General’s pricing misconduct is … staggering,” the lawsuit stated.
Just how much the FTC contends the firm has overcharged its customers is a mystery – for now. Paragraphs in the lawsuit that – in context – disclose or discuss those figures are redacted.
But whatever that figure, it is rising daily and impacting vulnerable Americans the most, the FTC says.
“The consequences of these overcharges fall most heavily on shoppers living on razor-thin margins — families who carefully budget every dollar and rely on accurate, transparent pricing simply to meet their day-to-day needs,” the FTC wrote.
“Rather than ensuring its prices at checkout are accurate, for years Dollar General avoided implementing safeguards to prevent continued overcharging, effectively shifting the burden of its own operational shortcomings onto the very communities and consumers who can least afford it,” the litigation continued.
“In doing so, Dollar General has taken advantage of vulnerable shoppers and has extracted millions of dollars in unlawful overcharges.”
Dollar General has not yet filed a response to the lawsuit.
Editor’s Note: How to Catch Pricing Errors at the Store
A few simple habits can help shoppers catch pricing mistakes before leaving the store.
- Take photos of the shelves: Snap quick pictures of the shelf tags for items you buy before heading to the register, especially for clearance or sale items.
- Watch the register monitor: Keep your eyes on the customer-facing screen as the cashier scans your items to spot unexpected price jumps immediately.
- Scan your own receipt before leaving: Take 30 seconds to review your paper receipt in the store foyer so you can request an immediate refund at customer service if a price is wrong.
KnoxTNToday encourages shoppers to compare advertised prices with checkout totals and bring discrepancies to store management’s attention.
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Jamie Satterfield is an investigative journalist covering crime, courts and the stories behind the headlines. She writes Let’s Talk: Law for KnoxTNToday, digging deeper to uncover the story behind the story.
Read more of Jamie Satterfield’s columns and learn more about her in her author bio on her KnoxTNToday author page. Follow her investigative reporting on Substack.
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