By Jonathan Stempel
Nov 12 (Reuters) – Family Dollar reached a $63 million settlement with the US Federal Trade Commission and 17 states of allegations that the discount retailer routinely charged shoppers more at the register than it advertised on store shelves, in weekly circulars, and on its website and mobile app.
According to settlement papers filed on Thursday in the Norfolk, Virginia, federal court, Family Dollar will offer $40 million of restitution and $20 million of future discounts to eligible shoppers, and pay $3 million to the states. It must also implement a “pricing accuracy” program to ensure shoppers are not overcharged.
Family Dollar was accused of “betraying the trust” of millions of Americans who rely on it for essentials, including many shoppers with low incomes or fixed budgets, and “imposing significant financial harm on the communities that can least afford it.”
According to court papers, overcharges since 2023 have totaled millions of dollars, and violated federal and state laws against deceptive practices.
The FTC and 20 states filed a similar lawsuit last month accusing discount retailer Dollar General of overcharging shoppers. Dollar General said it will defend itself and has not “willfully disregarded” its customers’ affordability needs.
Family Dollar recently had 7,076 stores in 48 US states and Washington, DC, court papers show.
Many are located in what the Chesapeake, Virginia-based company calls “food deserts,” where shoppers have a dearth of affordable options to buy food, cleaning supplies and other household staples.
Family Dollar did not admit or deny wrongdoing in agreeing to settle. Neither the company nor its lawyer immediately responded to requests for comment.
The 17 states are Alabama, Arkansas, Colorado, Florida, Iowa, Illinois, Kansas, Louisiana, Mississippi, Nebraska, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah and Wisconsin.
Family Dollar is owned by Brigade Capital Management and Macellum Capital Management, which bought the company from Dollar Tree for $1.01 billion in cash in July 2025.
(Reporting by Jonathan Stempel in New York; Editing by Aurora Ellis)
