The Federal Trade Commission and a coalition of 20 states filed a lawsuit against Dollar General on Monday, accusing the discount retailer of systematically charging customers more at the register than the prices displayed on its shelves, price tags, and advertisements.

The complaint, lodged in the U.S. District Court for the Middle District of Tennessee, alleges "long-running deceptive pricing practices" in which shoppers select items at one price only to be charged a higher amount at checkout. According to the filing, thousands of Dollar General stores have "taken advantage of vulnerable shoppers by extracting millions of dollars in unlawful overcharges." The pricing discrepancies prompted nearly 30,000 consumer complaints to the company between 2019 and March 2026, according to the lawsuit.

"Dollar General has betrayed the trust of millions of American consumers and imposed significant financial harm on communities and consumers who are already struggling to make their paychecks last," Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said in a statement.

The 20 states joining the federal action are Alabama, Arizona, Arkansas, California, Connecticut, Florida, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Tennessee, Utah, and Wisconsin. Dollar General shares fell about 4% after the FTC announced the lawsuit.

Dollar General disputes the claims

Dollar General rejected the allegations. "The lawsuit filed today by the Federal Trade Commission and several states suggests that we have abandoned our mission and willfully disregarded the affordability needs of our customers. Nothing could be further from the truth," the company said in a statement.

"Our goal is 100% accuracy between shelf and register prices in every store," the statement continued, adding that "occasional price discrepancies can occur" and that store employees are expected to make things right for the customer when they do. The company said it had cooperated with the FTC's investigation since early February and called the agency's settlement demand far out of proportion to any realistic estimate of overcharges. It said it would "defend this litigation vigorously."

A problem regulators have flagged for years

The FTC also alleges that company leaders knew how widespread the problem was but failed to fix it. Between 2019 and 2026, Dollar General entered into seven settlements in six states over inaccurate pricing and paid about $6 million in penalties, according to the complaint.

Ohio Attorney General Dave Yost sued the chain in November 2022 after county auditors found shelf prices that didn't match the register, and he later secured a $1 million settlement. New Jersey reached a $1.2 million settlement in 2023. Wisconsin, Vermont, and Colorado have also settled with the company, and Pennsylvania reached a $1.55 million settlement last December after finding that Dollar General stores failed more than 40% of the state's price-accuracy inspections between 2019 and 2023.

Marc Dann, a former Ohio attorney general whose law firm has filed multiple class action lawsuits against the company over mislabeled prices, told Fortune he has seen a "consistent pattern" of overcharging.

"There was a consistent pattern in those records of a 20% to 25% fail rate for Dollar General stores when inspectors came out to verify whether the shelf pricing matched the pricing at the register," Dann said. "It was essentially a crime committed, 25 cents at a time."

Dann said he found discrepancies across stores in all six states involved in his class action suits after reviewing thousands of public records from local weights and measures officials.

A 2025 Guardian investigation found that Dollar General stores failed more than 4,300 government price-accuracy inspections in 23 states between January 2022 and late 2025. One of the worst cases was a 76% error rate at a Dollar General in Hamilton, Ohio, in October 2022.

Company policy requires employees to update shelf labels when prices change. The Guardian concluded that the overcharges often stemmed from the industry's minimal staffing, which leaves too few workers to keep thousands of physical price tags current. Two years after Dollar General agreed to pay Wisconsin about $850,000 to settle price-accuracy violations, its stores in the state failed 31% of price inspections, the Guardian found.

Squeezed shoppers bear the cost

The lawsuit arrives as shoppers are still absorbing years of higher food costs. Grocery prices rose 1.8% in the 12 months ending in September, according to the Bureau of Labor Statistics. That increase compounds a steep run-up since the pandemic that has left grocery prices roughly a third higher than they were in 2019. The energy shock from the war in Iran has added further pressure by pushing up fuel and fertilizer costs throughout the food supply chain.

Dollar General's customer base is especially exposed. The company said in 2024 that its core customers, who account for about 60% of sales, come mostly from households earning less than $35,000 a year. Inflation has also pushed more middle- and higher-income shoppers into dollar stores in search of bargains, though low-income households have long been the backbone of the business.

Dann said that small price differences add up for low-income customers who depend on Dollar General for essentials on "limited budgets." He described the practice as "stealing a little bit at a time from a lot of people."

"I'm hoping some of these reforms will take hold because you know the biggest problem with Dollar General is that they serve some of the poorest people in the country," Dann said.

This story was originally featured on Fortune.com.