These Major Dollar Store Chains Are Under Investigation for Overcharging Shoppers
They're facing backlash and a formal lawsuit.
Bargain hunters regularly rely on discount stores for daily necessities, but with all Americans facing high inflation, more shoppers are taking advantage of dollar store deals than ever before. These new patrons include both middle and high-income customers, according to CNN, highlighting that nobody is immune to rising prices. But even as these companies are seeing more shoppers pass through their doors, they're now dealing with a surge of criticism—and even a lawsuit—related to overcharging. Read on to find out which big-name chains are under investigation.
Dollar stores have been doing great business.
Two of the largest dollar stores in the U.S., Dollar Tree and Dollar General, saw significant profit increases during the second fiscal quarter of 2022, The New York Times reported. Compared with the second quarter last year, Dollar General saw a 9 percent increase in revenue to $9.4 billion, as well as a 6 percent increase in profit. Comparably, Dollar Tree saw a 7 percent increase in revenue to $6.8 billion, with a 27 percent spike in profit, per The New York Times.
With shoppers pinching pennies, dollar stores are a seemingly reliable outlet to help you save a few bucks on groceries, household items, and discretionary purchases. But reports of price discrepancies have surfaced, suggesting that you may be spending more than you should be.
One state is taking a stand.
Dollar General is at the forefront of the overcharging issue, now facing a lawsuit from the state of Ohio for allegedly engaging in bait-and-switch advertising. According to a Nov. 1 press release from the Ohio Attorney General's Office (AGO), Dollar General stores in "multiple counties" have been charging customers at higher price at the register than what's displayed on the shelf.
An October investigation performed by Butler County Auditor Roger Reynolds, of the Division of Weights and Measures, found error rates ranging from 16.7 to 88.2 percent at these stores—well above the permitted 2 percent rate.
"Everything we buy these days costs more—Ohioans can ill-afford businesses that draw people in with the promise of low prices only to deceive them at the checkout counter," Attorney General (AG) Dave Yost, said in the press release. "This seems like a company trying to make an extra buck and hoping no one will notice. We've not only noticed but are taking action to stop it."
Yost called the overcharging "appalling behavior."
The lawsuit alleges that Dollar General is violating Ohio's Consumer Sales Practices Act by listing inaccurate prices, and the state is asking the company to pay damages to consumers along with $25,000 in civil fines for each violation.
"This is appalling behavior and should be answered for in a court of law," Yost said in the news release. "If you see this happening in a store near you, let my office know. We're here to protect Ohioans from being ripped off."
The AGO cited eight other affected counties, namely Cuyahoga, Franklin, Highland, Lucas, Madison, Richland, Summit, and Trumbull. Franklin County issued a press release on Nov. 1, adding that eight of the area's 10 Dollar General stores had also failed recent inspections and were overcharging shoppers.
If you live in Ohio and have been overcharged, you can contact the AGO at www.OhioProtects.org or 800-282-0515. Best Life reached out to Dollar General for comment on the lawsuit, but has yet to hear back.
Family Dollar is the second chain to cause a stir.
The Auditor's Office in Butler Country has certainly been busy, as it also identified pricing problems at Family Dollar, a subsidiary of Dollar Tree. In a Nov. 3 press release, Reynolds warned consumers about "the same type of failures" occurring at Family Dollar stores.
The agency confirmed that it performed price checks at 13 Family Dollar stores in the county since Oct. 28, all of which "failed with error rates between 12 and 84 percent." The press release noted that at some stores, price discrepancies were in customers' favor, ringing up for less than the price on the shelves, but Reynolds still stressed the severity of the situation.
"These prices are very concerning, especially at stores where nearly every error is in the store's favor," Reynolds said in the release. "We will continue to alert the public when we uncover rampant abuse like this."
When asked about the recent reports of overcharging, Kristin Tetreault, chief communications officer of Dollar Tree Inc, previously told Best Life that Family Dollar is "dedicated to serving the needs of [its] shoppers and providing them with great values on the product they need and want," adding that the company is "committed to operational compliance with all applicable federal, state and local laws."
READ THIS NEXT: Dollar General and Family Dollar Are Closing Stores, Starting Dec. 3.
This isn't an isolated incident.
This isn't the first time that these dollar stores have come under fire. Several Dollar General and Family Dollar stores were fined by the North Carolina Department of Agriculture & Consumer Services in April and again in August after "excessive price-scanner errors" were detected. Vermont also reached a $1.75 million settlement with Dollar General in 2019 after the chain violated the state's Consumer Protection Act, per Fox-affiliate WXIX.
In light of recent investigations, officials are urging customers to be mindful when shopping at dollar stores. "I want to remind consumers to be careful when shopping and make sure you're getting what you pay for," Franklin County Auditor Michael Stinziano said in the press release. "The Auditor's office will continue to be vigilant and out in the community checking scanners and gas pumps and protecting consumers."