Family Dollar has agreed to pay $63 million to resolve allegations brought by the Federal Trade Commission and 17 states that the discount retailer repeatedly charged customers more at checkout than the prices advertised or displayed on store shelves.

The proposed settlement, announced Thursday, November 12, includes $40 million for a customer reimbursement fund, a $20 million discount program and $3 million to be distributed among the states involved in the case. The agreement also requires Family Dollar to establish an independently assessed pricing accuracy program and prohibits the company from misleading customers about prices.

The FTC and the states alleged that pricing discrepancies were widespread across Family Dollar stores and that the company failed to adequately address repeated errors. According to the complaint, customers regularly reported being charged more at checkout than the prices displayed on product tags, store shelves, the company's website and its mobile application.

“Today's order will ensure Family Dollar stops deceiving consumers about its prices and returns money to consumers harmed by these practices,” Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said in a statement.

Under the proposed order, Family Dollar must establish a $40 million fund to compensate eligible customers who made purchases at its stores between January 1, 2023, and October 1, 2026. The retailer will notify eligible customers through in-store notices and online announcements.

The agreement also requires Family Dollar to provide a separate $20 million discount program. Customers will be offered 15% off a range of products for two days as part of the settlement.

In addition to the financial terms, the retailer must implement procedures to regularly monitor and verify prices, train employees to identify discrepancies and correct pricing errors. The program must undergo independent assessment and certification every year.

The 17 states participating in the settlement are Alabama, Arkansas, Colorado, Florida, Iowa, Illinois, Kansas, Louisiana, Mississippi, Nebraska, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah and Wisconsin.

Family Dollar operates more than 7,000 stores across 48 states and Washington, D.C. The company, headquartered in Chesapeake, Virginia, did not immediately respond to a request for comment.

The settlement follows a separate lawsuit filed in October by the FTC and 20 states against Dollar General, which faces similar allegations of deceptive pricing practices. That litigation remains ongoing.