Congress members urge FTC to probe retailer price discrepancies

FTC and 20 states sued Dollar General two days earlier

The Oct. 28 letter came from House Democrats representing 17 states and the District of Columbia. It was addressed to FTC Chair Andrew N. Ferguson, an appointee of Donald Trump, and sought an investigation into reports of overcharging at Dollar General, Family Dollar, 7-Eleven and Circle K after two Guardian investigations documented recurring differences between shelf labels and register prices.

The lawmakers said the problem was not confined to a few locations. “These reports show that these incidents are not isolated to a geographic area or to a handful of stores,” the Congress members’ letter said. “Instead, the scale of documented violations seems to be the result of systemic failure within corporate operations, leading to customers overpaying for their groceries, potentially without knowing.”

The first Guardian investigation, published in December, found that Dollar General had failed more than 4,300 government price-accuracy inspections in 23 states over a three-year period. The failed checks involved products including peanut butter, spaghetti sauce and Flintstone vitamins. The same investigation found that Family Dollar had failed 2,100 price inspections in 20 states over the same period.

A second Guardian investigation, published last month, found similar discrepancies at 7-Eleven and Circle K. Consumer complaints and state and local inspections revealed overcharges involving snacks, beverages, toiletries, tobacco and medications. Some stores also charged more at the pump than the prices displayed on large road-facing signs.

The congressional request came two days after the FTC and 20 states filed a federal lawsuit against Dollar General. The lawsuit accused the chain of a “pattern of inaccurate pricing” that “affects millions of purchases” and said the company knew about the problem for years without correcting it.

The lawmakers described the lawsuit as a positive step but said the broader evidence required a wider inquiry. “While this step is positive,” they wrote of the FTC’s lawsuit, “the widespread nature of the issue revealed by public reports and state inquiries warrants a full-scope probe.”

Rep. Nikki Budzinski of Illinois, the letter’s lead author, said she and 29 colleagues wrote to the CEOs of Dollar General and Family Dollar in December seeking internal documents about pricing disparities. Neither company complied, she said, prompting the lawmakers to ask the FTC to act. The agency is charged with policing unfair, deceptive and anti-competitive business practices.

The letter arrived on the eve of a midterm election in which affordability had emerged as a major concern. A recent Harris Poll conducted for The Guardian found that voters ranked gas prices, grocery prices and living expenses as their top three election issues. Another poll, released by the AP-Norc Center for Public Affairs Research, found that nearly 80% of voters disapproved of Donald Trump’s handling of the cost of living.

“Gas prices are at $4.50 a gallon in my district,” Budzinski said. “Any uptick in a gas price, or any uptick in the price of a banana or the price of ground beef, means families, in reality, making very difficult decisions as to whether they’re even able to afford that item any more … They’re making decisions as to whether to fill their gas tank up completely or fill their grocery basket up.”

The lawmakers also emphasized the limited shopping options available to some constituents. Many residents live too far to walk or drive to independent grocery stores or chain supermarkets, making a Dollar General or 7-Eleven potentially the closest place to buy food. “Because these stores are often the sole option for essentials in underserved neighborhoods and rural communities, these companies occupy a unique position of trust and responsibility,” the letter said. “It is deeply troubling to see that these limited options have been exploited to the detriment of working families.”

Rep. Shontel Brown of Ohio cited her own experience. She lives near a Dollar General in Warrensville Heights and visited the store earlier this year to buy soda pop. The total at the register did not match the advertised price after she applied sale prices and coupons, she said. “I asked the cashier, ‘Wait a minute, how am I paying X amount when these items are on sale and I’ve applied these coupons?’” Brown recalled. “And she said, ‘Well, the system does that. It does it a lot with the pop.’”

Brown left without making the purchase. “I have the luxury of not counting every single dollar in my budget,” she said. Many of her constituents lack that flexibility. “I can’t imagine folks who are coming in there, who have to itemize every dollar, dealing with something like this. So when the letter was brought to my attention, I was a ‘hell yes.’”

All four companies told The Guardian in written statements that they try to keep register prices consistent with shelf prices. Dollar General said it would “defend this litigation vigorously,” that it aims for 100% price accuracy and that it cooperated with the FTC investigation. The Guardian said it had contacted the FTC and the four chains for comment.