Federal Suit: Dollar General Overcharged Low-Income Shoppers

Discount retail has long relied on the promise of low, fixed prices for budget-conscious consumers. That promise is now at the center of a major legal dispute filed in federal court in Tennessee. The Federal Trade Commission and 20 states sued Dollar General on Monday, alleging that the chain routinely charged customers more at the point of sale than the prices displayed on shelves and advertisements.

The complaint, filed in the U.S. District Court for the Middle District of Tennessee, describes a pattern of deceptive pricing practices that persisted for years. Between 2019 and March 2026, the lawsuit states that pricing discrepancies generated nearly 30,000 consumer complaints. The agency argues that the company exploited vulnerable shoppers by extracting millions of dollars in unlawful overcharges across thousands of locations.

Regulators have flagged pricing errors at Dollar General for years, but the company has reached settlements in multiple states. In 2022, Ohio Attorney General Dave Yost sued the chain after auditors found mismatched prices, leading to a $1 million settlement. New Jersey settled for $1.2 million in 2023, and Pennsylvania reached a $1.55 million agreement in December 2025. The complaint notes that the company paid about $6 million in penalties across seven settlements in six states between 2019 and 2026, despite internal knowledge of the issue.

Marc Dann, a former Ohio attorney general who has filed class action lawsuits against the retailer, described a consistent pattern of overcharging based on public records. He reported a 20% to 25% fail rate for price accuracy in stores he reviewed. A 2025 investigation by The Guardian found that Dollar General stores failed more than 4,300 government price-accuracy inspections across 23 states between January 2022 and late 2025. One store in Hamilton, Ohio, recorded a 76% error rate in October 2022.

Dollar General disputes the allegations, stating in a written release that the lawsuit suggests the company abandoned its mission to provide affordable goods. The company maintains its goal is 100% accuracy between shelf and register prices. It added that occasional discrepancies can occur and that employees are expected to correct errors for customers. The retailer said it cooperated with the FTC investigation since February and called the agency's settlement demand disproportionate.

Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said the company betrayed the trust of millions of consumers. He noted that the practices imposed financial harm on communities already struggling to make paychecks last. Dollar General shares fell approximately 4% following the announcement of the lawsuit.

The legal action arrives as grocery prices continue to rise. The Bureau of Labor Statistics reported that grocery prices increased 1.8% in the 12 months ending in September. This inflation follows a sharp run-up since the pandemic, leaving costs roughly one-third higher than in 2019. Dollar General said in 2024 that about 60% of its sales come from households earning less than $35,000 annually.

The states joining the suit include Alabama, Arizona, Arkansas, California, Connecticut, Florida, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Tennessee, Utah, and Wisconsin. The company stated it will defend the litigation vigorously while maintaining that it serves some of the poorest people in the country.