FTC, Utah and 16 states strike $63 million settlement with Family Dollar over pricing allegations

The Federal Trade Commission and 17 states — including Utah — have reached a $63 million settlement with Family Dollar stores over allegations that the company routinely overcharged customers at the register more than its shelf and tag prices. 

“When money is tight, every dollar matters,” Utah Attorney General Derek Brown said in a prepared statement issued Thursday. “Utah families shouldn’t have to worry that the price at checkout will be higher than the price they saw on the shelf. This settlement puts money back in consumers’ pockets and helps ensure shoppers get the prices they were promised.” 

Under a proposed order filed Thursday in U.S. District Court for the Eastern District of Virginia for the settlement, Family Dollar will be required to create a $40 million fund to pay restitution to eligible customers and a $20 million discount program for Family Dollar customers. 

The company will also be required to pay about $3 million to divide up to the states that filed the complaint against the company. Along with Utah, those states include Alabama, Arkansas, Colorado, Florida, Illinois, Iowa, Kansas, Louisiana, Mississippi, Nebraska, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee and Wisconsin. 

The settlement order also prohibits Family Dollar from misrepresenting the prices of its goods or services and requires the company to create a pricing accuracy program to regularly check prices and train employees to spot pricing errors. That program will also need to be independently reviewed and certified every year. 

The company will also be required to post notices in its stores, and on its website and app telling customers they may be eligible to receive payment as part of the settlement. 

In the settlement order, Family Dollar “neither admits nor denies any of the allegations” included in the states’ and FTC’s complaint. 

“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 prepared statement. “Today’s order will ensure Family Dollar stops deceiving consumers about its prices and returns money to consumers harmed by these practices.” 

Family Dollar operates more than 7,000 stores across the nation, “and for many of its customers, shopping at Family Dollar is unavoidable,” the complaint against the company says. 

“Its locations are concentrated in low-income urban and rural communities, including areas Family Dollar itself describes as ‘food deserts,’ where residents have little access to full-service grocery stores,” the complaint says. “For many families in these neighborhoods, Family Dollar stands as one of the only accessible sources for basic household necessities.”

Many Family Dollar customers are “carefully stretching every dollar they have to cover basic needs,” the complaint says, “yet Family Dollar routinely charges more at checkout … including for essential household products such as milk, eggs and diapers.” 

“For consumers living paycheck-to-paycheck, even a slight price increase at checkout can lead to real, adverse consequences,” the complaint says. 

The complaint alleges Family Dollar “knows that it harms customers by persistently overcharging prices at the register that are higher than those it advertises,” and that scope of the company’s “unlawful pricing conduct is extensive.” 

“Since 2022, federal, state, and local regulators have cited Family Dollar for thousands of pricing violations, resulting in fines exceeding $3 million,” the complaint says. “And since 2024, Family Dollar has entered into multiple settlements with state Attorneys General, paying over $800,000 in penalties for inaccurate pricing.”

The settlement with Family Dollar comes after the FTC and 20 states, including Utah, filed a complaint on Oct. 26 against another dollar store chain, Dollar General, alleging similar deceptive pricing practices. 

The litigation against Dollar General is ongoing.