FTC and 20 states sue Dollar General over shelf price gaps

Consumer protection officials filed a lawsuit on Monday against Dollar General. The agency and 20 state attorneys general accuse the chain of collecting more money at the register than it lists on shelves, tags, and ads.

The Federal Trade Commission claims thousands of stores used this method to extract millions of dollars. The complaint states the retailer lacked sufficient safeguards to stop the practice. It also notes that Dollar General received tens of thousands of consumer complaints but failed to implement policies to fix the issue.

Alabama, Arizona, Arkansas, California, Connecticut, Florida, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Tennessee, Utah, and Wisconsin joined the federal suit. The complaint argues the company took advantage of vulnerable shoppers.

Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said the retailer betrayed consumer trust. He stated the practice imposed financial harm on communities struggling to make paychecks last.

Dollar General shares dropped about 4% following the announcement. The company did not immediately respond to a request for comment.

The legal action arrives as shoppers seek discounts amid high food and gas prices. Officials from both political parties are also highlighting consumer protection efforts ahead of the midterm election next week.