> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50.
This very rarely happens in MA, because when it does the store has to give you the item for $10 off, including if that makes it free. And they have to post a sign at the register explaining the law, which means when you're invoking it all you need to do is point at the sign.
Note that this law is only for certain products. We would have people at the liquor store I used to own point out mislabeling occasionally and claim we owed them the $10 difference from this law. While we tried to work with customers when we made a pricing error, not only does the accuracy law not apply to alcoholic beverages, but it would often be illegal for us to offer the customer the mistaken price. Alcohol retailers in MA are not legally allowed to sell their products for less than they purchased them.
Michigan in the 90s had a similar rule. Customer gets 10x the overcharge (up to $5 max). I can guarantee you they fixed the price immediately.
Where I live there’s no such rule I can tell you no one is correcting the price when I point out that I got overcharged (they usually shrug with “it does that sometimes”).
It's different in different states. In Maryland, once a complaint is filed with the relevant authority, the store has a certain number of days to correct pricing. Most retailers will give you the misprice if it's clearly their fault in not changing the tags, as a matter of policy.
The confusion around this law is quite frustrating, though. Quite a few customers think they're entitled to not just prices on tags that haven't been updated, but prices for what are clearly entirely different products.
Dollar stores are private equity with a checkout lane.
In 2025, Dollar Tree sold Family Dollar to a group of private-equity firms: Brigade Capital Management, Macellum Capital Management and Arkhouse Management Co.
It’s a business model cosplaying as poverty relief while quietly siphoning money from the people least able to lose it. They already run on a thin-staff, high-volume model. That 23% increase is not a glitch. They know their customers can’t drive across town to complain. They know the regulators won’t scale fines to revenue.
> Has private equity ever done anything good for anyone outside of the investors?
If it's not publicly traded, it's super secure from any public accountability.
And while I'm increasingly hostile toward the shareholder model, we do get one transparency breadcrumb from this (gov managed) contrivance: The Earnings Call
Earnings Calls give us worthwhile amounts of internal information that we'd never get otherwise - info that often conflicts with public statements and reports to govs.
Like CapEx expenditures/forecast and the actual reasons that certain segments over/underperform. It's a solid way to catch corporations issuing bald-faced lies (for any press, public, gov that are paying attention).
AT&T PR: Net Neutrality is tanking our infra investment
ATT's EC: CapEx is high and that will continue
I'll bet 1 share that there are moves to get this admin to do away with the requirement.
>If it's not publicly traded, it's super secure from any public accountability.
Under the existing legal and regulatory model, yes.
But what abusing that model long-term will eventually result in government-level change that effectively bans the existence of such exploits, wide-spread vigilantism, and/or some sort of collapse.
> what abusing that model long-term will eventually result in government-level change that effectively bans the existence of such exploits, wide-spread vigilantism, and/or some sort of collapse
The endpoint of vigilantism and collapse is more economic opacity. Not less.
My personal view is companies with more than any of 1,000 employees, $10mm revenue or a $100mm valuation should have to file a simple annual disclosure showing the cap table ad balance sheet, a simple P/L, list of >5% beneficial owners and their auditor. But the path to that is through legislation in a complex, stable society.
I'm not sure why private equity is singled out here, when every time a public company does a bad (eg. Boeing), people crow about how public companies only care about juicing next quarter's earnings.
The big difference is the extent to which PE will go to juice the quarters earnings. Public companies cannot and will not just fire all staff, fleece customers to the point they won’t return and take on debt that they have no intention of paying back. PE will do all of the above and more if it means they get their money. Which means, you as a customer get screwed over more when PE is involved.
>Public companies cannot and will not just fire all staff, fleece customers to the point they won’t return and take on debt that they have no intention of paying back.
Why? Is there some code of conduct for public companies but not private ones?
> Is there some code of conduct for public companies but not private ones?
No but there’s a difference between private companies and PE owned companies. PE model is very different from regular private companies, and it often involves extracting maximum profits at the expense of the company itself.
And as far as public companies go, shareholders will have to say something about the operation of the company if you start intentionally sinking it.
Because a PE fund is at most a seven year timeline, and everybody knows it. There is absolutely no incentive to add value beyond the next sale, and often you only need to add the perception of value. To quote my CTO of a PE owned company: "we want to make it look like we're on the road to <big investment in strategic roadmap>", not actually accomplish it
> Because a PE fund is at most a seven year timeline
Berkshire Hathaway is a PE fund with permanent capital.
Broadly speaking, making generalisatios about PE is almost impossible because it's an asset class which is, essentially, all non-public business. Instead, it's more useful to think about which element private equity touches you're specifically complaining about: capitalism in general, financial transparency, leverage and liability.
The problem with PE is only the hyper aggressive and generally terrible ones make the news.
The quiet ones that simply run business well, don't make the news.
There are PE firms that specialize in rescuing distressed companies with potential and turning them around. In many cases not firing anyone and holding onto the form they acquired for a long time.
> Is there some code of conduct for public companies but not private ones?
There's a pattern of behavior, to be sure. The primary control on public companies is shareholder scrutiny. Gutting your company for short term gains, is not always popular. The more diverse the shareholder cohort, the less popular it tends to be.
Private companies don't mind it when they can literally start a new company with the assets from the old without the pesky plebian investors.
No? Companies aren't about making things anymore, they're about stock buybacks and making as much money as possible while doing as little as possible (or selling our data). That's why the refrigerators have ads and break after two years. At least private equity is more honest about being vulchers, whereas Kohler is going to look you dead in the eyes and try to convince you you need a toilet with a camera in it. What a joke.
>At least private equity is more honest about being vulchers,
Again, what's the basis of this? Half the people in this thread seem to take it for granted that PE is somehow "worse" than public companies, but can't seem to articulate why. The only legal difference between public companies and "private equity" is that the former has stricter reporting requirements and can be bought by non-accredited investors. There's nothing about "ostensibly, trying to make a good or provide a service" or whatever.
PE does this wealth extraction trick which breeds the ill-will.
Eg: purchase a few mom&pop veterinarian business in some area. Squeeze the service rates, trim hours, reduce staff, add some debt. The PE investor gets cash out - the business is destroyed and the community loses a (critical? valuable?) service.
It's a common pattern. But not all PE is like this. Like "not all men" and "not all guns" - but enough that the pattern is easily associated - and disliked by many w/o the power to keep them out.
Private equity is far worse. It means 100% ownership by a group of sociopaths who are executing on a plan to extract as much cash as possible quickly with no other goals at all.
At least public companies have some diversity in ownership and agenda.
>Private equity is far worse. It’s mean 100% ownership by a group of sociopaths who are executing on a plan to extract as much cash as possible quickly with no other goals at all.
...as opposed to the average public company? An average company might have more "average joe" shareholders (almost by definition, because private equity is typically off limits to non-accredited investors), but outside of meme stocks, there's not enough of them to make a difference. The rest of the shareholders (eg. pension funds, insurance companies, endowments, family offices) can be assumed to behave like ruthless capitalists chasing the highest returns, regardless of whether the company is public or not.
I see these private equity takes on HN frequently and am really baffled by the ignorance. There's a very clear difference between a public and private company - the fiduciary duty to shareholders.
There is a legal requirement for directors of public companies to act in the financial interests of all shareholders. In practice, and according to precedent, this means long term viability of the company, in other words, a sustained profitable business.
There is no such requirement for a private company. In practice (esp. recent history), this means private equity firms acquire successful businesses to "mine them" of their wealth - capitalizing their assets for personal gain, and leaving nothing left.
The question for public companies isn't how many retail vs institutional investors they have, it's whether an investor can make a claim about a breach of fiduciary duty. It's patently false to say that the institutional investors (who yes, do have more sway) aren't interested in the company acting in their financial interests.
>There is a legal requirement for directors of public companies to act in the financial interests of all shareholders. In practice, and according to precedent, this means long term viability of the company, in other words, a sustained profitable business.
All that means is that controlling shareholders can't use the company as a piggy bank and raid it to fund their other ventures. It doesn't mean the business has to be "sustainable" or whatever. In fact, it's perfectly legal for the board to sell to a "vulture" PE firm that will sell the business off for parts, as long as the sale price is good enough.
> There is a legal requirement for directors of public companies to act in the financial interests of all shareholders
No, there isn't.
The whole point of Revlon duties is that they trigger "in certain limited circumstances indicating that the 'sale' or 'break-up' of the company is inevitable" [1]. Outside those conditions, "the singular responsibility of the board" is not "to maximize immediate stockholder value by securing the highest price available."
> There is no such requirement for a private company
Are you thinking of minority rights? These vary based on whether a company is closely held or not [2], not whether it's public or private.
Why bring up Revlon duties when as you say, their relevance is only during company acquisition or restructuring?
It's well established over hundreds of years of case law that directors of public companies have to act in good faith to benefit the company (and therefore, the shareholders).
> Why bring up Revlon duties when as you say, their relevance is only during company acquisition or restructuring?
It’s an exception that proves the rule. In that specific case, what you’re saying applies. In all others, it does not.
> It's well established over hundreds of years of case law
Where are you getting this from?
> directors of public companies have to act in good faith to benefit the company (and therefore, the shareholders)
Where did you get that this only applies to public companies? What you’re describing is basic English and Delaware corporate law.
Also, there is a massive difference between “all shareholders” and “the shareholders”. And nothing about public companies says they can’t be structured in a way that sometimes undermines some shareholders. This comes up most commonly when different shares have different voting or blocking rights. But it’s also fundamental to the intent behind B Corps, publicly traded or not.
* If a company controlled by PE goes bankrupt, shareholders (PE) likely make a profit
* But if a publicly listed company goes bankrupt, shareholders lose their money
In other words, PEs almost never lose money, so they could extract the last bit of a company, even more short sighted than shareholders of a public company
> If a company controlled by PE goes bankrupt, shareholders (PE) likely make a profit. But if a publicly listed company goes bankrupt, shareholders lose their money
This isn't remotely true. Plenty of private equity investments go bust before they can pay themselves back. And plenty of public company investors milked a company for interest payments or dividends into the ground.
> PEs almost never lose money
Private equity funds regularly lose money. Usually to lenders.
You're complaining about leverage in general. Probably not private equity per se.
>* If a company controlled by PE goes bankrupt, shareholders (PE) likely make a profit
That's not necessarily a bad thing, or sign of anything sinister. If a business is failing, and you buy it for pennies on the dollar, and despite your best efforts it still goes under, so you liquidate it, you can still turn a profit if the price you paid is lower than what you got from liquidating it. That's not bad, because private equity (or anyone else, for that matter) isn't expected to operate as a charity. The only reason they're willing to stump up the cash to buy the business in the first place is the expectation that they'll make money. It's also not bad for the original owners either, because the fact that they hold to PE rather than someone else, or liquidating it, suggests that the PE offered a better deal than either.
>But if a publicly listed company goes bankrupt, shareholders lose their money
If you’ve ever spoken to employees of a public company that was sold to private equity, you’ll know how much of a difference there is. It is a significant difference.
> The rest of the shareholders (eg. pension funds, insurance companies, endowments, family offices) can be assumed to behave like ruthless capitalists chasing the highest returns, regardless of whether the company is public or not.
Right but they are seeking the highest returns as equity holders typically, usually through things like stock buybacks.
Private equity firms have much more devious ways of looting the companies, like management fees, acquiring other portfolio companies, and various other tricks.
If you’ve ever seen the Goodfellas scene where they bust out the nightclub, that’s quite literally their business model.
>Private equity firms have much more devious ways of looting the companies, like management fees, acquiring other portfolio companies, and various other tricks.
"looting the companies" is non-nonsensical when they also own it. It's like saying a scrap yard is "looting" the cars it bought by taking out the valuable parts to resell or whatever. The rest of the stuff might make sense in the context of the LPs getting screwed over, but not in the context of portfolio companies that they own.
PE puts very little of their own money into the deal though, while they own it they don't buy it. They use incredibly high leverage and often saddle the company with monstrous debt, then loot the assets to pay the interest and take management fees while doing all this. Red lobster is a great recent example. They sold off all the real estate, then had stores lease it back, turning profitable locations into losers. They often do the same thing with manufacturing, goodwill, brandnames and sales channels.
Think of this like an oil well. If you pump off all the gas, you depressurize the reservoir and can never get the oil. You need to slow your production to get the oil first, but private equity is happy to skim the cream and leave the milk to spoil.
Looting the companies is accomplished by stacking up debt and then giving themselves the money. Occasionally there are a few variations like looting a pension fund or taking a high quality product and making it horrible and selling that until people notice.
It’s literally their business model, it’s happened thousands of times and is a very clear fixture of the modern American business climate.
If you don’t know this it’s because you aren’t looking or it’s in your interest to say you don’t know this.
Private equity are the crows of the economy. They pick off weak / dysfunctional businesses and open space for fresh competition (or for other markets to open up).
As far as I’ve seen that’s as far from the truth as it can be. They in fact consolidate terrible businesses, undercut the good ones and drive them out of the market until only they are left, after which point, they get even worse.
From what I've seen, they take a terrible business and liquify its valuable assets for their investors, freeing up capital to be invested more productively elsewhere in the economy. Of course those investors could take the money and commission a bunch of statues of themselves, but frequently they do something more productive than that.
A lot of the negative reaction to them seems to me to be mostly emotional. They'll dismantle a business that holds a lot of nostalgic value for people, even though it's long since ceased to be a viable and productive company. But it wasn't their fault that the business was in that situation in the first place! Years of mismanagement and neglect or perhaps disruption from a competitor left the business in zombie-like state. PE came along and put it out of its misery rather than allow it to slowly crumble while depreciating the value of its illiquid assets.
> lot of the negative reaction to them seems to me to be mostly emotional
Mine specifically stems from PE buying up all but one 24x7 emergency vets in a 20 miles radius from me. All of them were thriving businesses. There is only one remaining non PE ones has its days numbered. After monopolizing the emergency vet market, they shut down a few locations, which previously acted as competition for each other, effectively cementing monopolies in those individual neighborhoods as well. Now, you pay $200 to just get your pet checked out and always have to wait anywhere between 6-8 hours in triage if your pet isn’t literally dying, because they are perpetually understaffed and there are no other options. They also recommend unnecessary tests and treatments, present them as “optional” but refuse to treat your pet if you don’t agree to their “optional” treatment plan.
Lots of businesses have big positive externalities [1]. They provide more benefit to their communities than they take in for themselves. Unfortunately, these sorts of businesses are easy pickings for PE.
Artists are a classic example. They generate huge positive externalities for a community while reaping almost none of the benefits for themselves. Artists get severely exploited by the economy for this!
To counteract this problem we need other ways of addressing the positive externalities. In the case of artists, this usually comes in the form of public (and private) patronage and endowments for the arts.
What you are describing the best-case scenario. They happen.
What also happens is, they take operating businesses with reasonable returns, buy up all it's supply chain or it's competitors to reduce costs or enable monopoly pricing, then load the company up with debt, squeezing it into a terrible company. That is the bad scenario which people object to.
They could do this, but there's not enough targets of this type for the money invested in the sector. They've also proven to not have the advertised & applicable expertise to run companies any more efficiently than current management. Nostalgia had nothing to do with it unless that's one of the company's assets. I've been inside on three PE acquisitions, and 5 sales by PE to new funds. The playbook was the same for them all: predictable, decent cash flow, cut expenses, grow enterprise sales, sell on before long term cracks from lack of strategic investment showed. If anything they accelerated the decline of healthy going concerns, but at each sale the insiders did great.
If only it actually played out that way[0][1][2][3]
Whatever legal and theoretical role they play in the economy does not match the actual, real role they are playing: PE firms are by and large, economic vampires. They have a well documented history of sucking the life out of a sector at the expense of workers and consumers alike
That's not true at all! Funds often look for mature companies with predictable cash flow. They can make returns while also squeezing margins under the illusion of expertise and economies of scale and seek to the next fund for a multiple. They're an alternative to the massive headache of going public and getting a liquidity event, not typically the model for your weak and dysfunctional company.
Nobody in this comment chain was saying it was good for the customers. The GP was saying that they clear out room for new businesses, and if brick-and-mortar-fabric-superstore were still a viable model someone would be doing it.
I am looking for fabric right now and am terribly frustrated not to have anywhere but limited quilting shops available. Online is not an answer, because you can't handle the fabric for weight, exact color, and stretchiness.
JoAnn drove all the medium-sized fabric stores out and left us with nothing.
The lack of customer density over time drove out all the fabric stores - medium sized or not.
At-home sewing has been declining since I've been alive, and it was just barely hanging on when I was a kid. The demographics simply cannot support these stores in most locations outside of hyper-dense cities.
Not to mention the folks who shop for fabric tend to be some of the most cost-conscious consumers around. They are more or less the prototype of a customer who will go to a B&M store and then price match on-line,.
I'm honestly surprised even Jo-anne survived as long as it did.
They pick on the weak companies but the basic model is to pick over the corpse and leave someone else holding the bag. Make it look good on the surface, leverage it to the hilt, extract cash and let it die.
You stay in this one. If PE wasn't producing value it would disappear. What, you think people dump money into PE because they want to twirl their villainous moustaches?
Most people would say that extracting wealth and concentrating it into an ever shrinking group of elites is making the world worse. They do this both from the companies you and I might work for, but more importantly from the markets that have no defenses.
this would be somewhat arguable as okay except for their introduction into categories like daycare, emergency rooms, drug and alcohol rehab, care homes for the geriatric and disabled, etc. things that probably shouldn’t be profit oriented to begin with yet are and are being snatched up by private equity, worsening outcomes in basically all of them
Except that Americans pay far more for these services than places where they aren't profit oriented. Try again. Reality does not support your assertion.
> Has private equity ever done anything good for anyone outside of the investors?
Yes. Productivity typically goes up [1]. Its reputation for job cutting is overblown [2], as is its record on price increases [3]. And historically, it's tended to decrease concentration in the industries it operates in. (The conglomerate break-ups of the 1980s were fuelled by new entrants and carve-outs.)
Instead, what I think we have is a category error. Berkshire Hathaway is a private equity shop as is all venture capital [4], and most family businesses of any scale are structured identically to sponsor-owned firms. Meanwhile, LBOs have been unable to shake the private-equity label for decades, unless they're lead by a founder, in which case they're "take private" transactions. In essence, we brand failed alternative asset strategies as private equity ex post facto.
Moreover, transaction size is negatively correlated with returns, particularly for leveraged buyouts. So the biggest private equity deals, which represent a minority of transaction activity, are disproportionately (a) bad and (b) public.
Finally, we get a lot of false conflation of market failures to private equity per se. Private-equity owned hospitals are bad [5]. But I haven't seen great evidence they're worse than other privately-owned hospitals with similar scale. The problem is hospitals probably shouldn't be run for profit or on-locally. But because nobody in particular is defending private equity, that's easier to attack.
The question anyone reading this analysis should ask is: if private equity is so benign, where do the returns come from?
The unlock, which these papers don't understand, is the extractive nature of P/E that is hidden.
A few clues:
1. A .5%-1% increase in prices is meaningful (Overall industry prices rise after buyouts, but again the price increase is on average very modest.) Retails margins routinely are measured in fractions of percentage points (bps). As an example, even if overall hospital prices stayed similar, P/E firms have been caught jacking up prices on people who need it most. Research on "Surprise Billing" in emergency rooms spiked immediately after PE firms took over staffing groups. Are you surprised?
2. Equity multiples are "effectively" a form of stealing from retail / pension plans: this is where the real 'theft' happens (if you want to call it that). If you reraterevenue from 6x (private) to 15-20x, someone is now paying 2-3x more per dollar to have that company in society. The key is the P/E OWNERS reap that value, so even if there are no job cuts, the wealth being created aggregates 'money supply' to the owners. This has downstream impacts on inflation.
3. Independent of aggregate effects - local effects are quite devastating. This is not P/E's fault, but closing down plants can kill towns for good. The question here is ownership - a family feels some tie to the community to attempt to help their friends and neighbors. P/E absolutely destroys this tie - the subtle but measurable effects compound.
Finally, even if you like P/E as a VEHICLE (which - I would argue it hasn't been a 'good' ones since like the late 90s), you can't ignore the fact that it's returns have largely been eaten by fees.
You're right to say that P/E is just playing the market. That doesn't mean that its impact on society has been good - the entire reason we're in the current political and economic situation we are today are by following the 'laws of the market' which have hollowed out the middle class and created a pretty large affordability crisis despite the world having achieved record levels of wealth.
The transfer from 'doers' to 'owners' has been a net negative for American society, and one of the primary reasons we don't 'build' things anymore - it's just not capitally "efficient"
> if private equity is so benign, where do the returns come from?
“During the last 10 years PE on average did not outperform the public markets in aggregate” [1]. (Individual firms overperform, some of them consistently.)
> even if you like P/E as a VEHICLE (which - I would argue it hasn't been a 'good' ones since like the late 90s), you can't ignore the fact that it's returns have largely been eaten by fees
Yup! Though nitpick: we often stop calling it PE when it works. VC is PE. So are Berkshire Hathaway and founder-led “take private” transactions.
> transfer from 'doers' to 'owners' has been a net negative for American society
PE is often an exit vehicle for small builders. Particularly in the space that deals with SBA loans.
Not yet. Sometimes employees if they get second bite of the big apple. PE do well in capital-intensive sectors. I'm not sure if their playbook fits the real needs of dollar stores. Instead of focusing on things like debt and aggressive cost cuts, most customers just want fair prices, stocked shelves, clean stores, friendly cashiers and basic respect—things that PE firms often ignore. In DFW, I was surprised to see 1-2 person dollar stores!
So I work in commercial real estate, obviously a large private equity influenced industry. I've worked in REPE and in other capacities.
There's degrees of PE. Some good, fine, and some worse.
Take real estate development. It's probably one of the suckiest businesses to be in. I know 3 developers who have committed suicide because when things go wrong, your entire life collapses (you put up all your assets in order to obtain construction loans). The litigation, brain damage, and risks are enormous. Increasingly, the payoff is awful (due to worsening legislation and NIMBYism and worse market condiditions)
However, private equity in development I think is a good thing. When there are investors willing to put this money at risk, we get much needed construction of housing (see Austin, TX where rents are falling off a cliff due to over building).
Now look at Los Angeles, which new permits are literally almost non-existent because LA is one of the most hostile places for developers. You can't make money in LA, so there's no capital available.
Then you end up with "affordable" housing developers adding the only supply at $600-900k/unit costs vs the market rate developer at $300-600k/unit.
----
On the other hand, "value add" private equity is much more suspicious. It's more cut throat, easier to end up in crony capitalist situations by operating with a "cut expenses, provide less, make big bucks" model. The people in this world are the kind of guys who have never done anything hard with their hands other than gotten a sore thumb from pounding too hard on their keyboards to adjust their excel model ("Mr. The Model is Always Right") too hard all night long.
This is how we end up with old properties who get flipped 4x each being sold with "upside the seller was too stupid to take advantage of" and ending up in situations where tenants get priced out due to private equity seeking infinite growing returns. Oh and by the way, every previous owner did "lipstick on the pig" jobs because why not try to save costs and make your levered IRR 16% instead of 12%? You cannot show that kind of return when you promised 18%... then it'll make it harder to fundraise your next deal!
This isn't to say that "value add" is a dirty business. We certainly need to balance the incentive to modernize and renovate properties. An d developers overbuilding isn't always a good thing.
So its nuanced. I think people need to fairly give credit that there are both good and bad. The capital efficiency is real and produces real world outcomes since there is a strong financial incentive at the end of the door.
But financial incentives sometimes bump up to issues causing harm in real life, which need to be recognized and called out.
Why is private equity different from any other form of organization? Publicly traded companies are even more addicted to getting revenue. Non-profits like universities may not have shareholders, but somehow the price of tuition keeps skyrocketing even faster than the prices at the dollar stores. And it's not like the religious charities have been pure.
That's a good point. Private Equity is a fairly broad umbrella term that encompasses a variety of investment strategies and business models.
The type of Private Equity that most here are referring to is the type that buys up existing businesses, squeezes as much money as possible out of them, and throws their desecrated corpses in the gutter. These "investors" are a blight on society, this activity should be criminalized, they should be in prison.
But there are a lot of well-meaning investors who do great things for society that also get stuck with the same label.
Just like crows! People hate crows even though they play a valuable role in ecosystems.
I would argue that moribund businesses who maintain a competitive moat but are otherwise extremely unproductive and inefficient are the real blight on society. If PE firms can liquidate those businesses and open up the market while freeing up capital for more productive investment then I fully support them.
I would love to hear some counterexamples though. Productive and innovative businesses with really solid fundamentals (balance sheets) that were acquired and dismantled by PE.
Weren't they losing money for years on all-you-can-eat seafood specials [1]?
It's not uncommon in the fast food business to be breaking even or losing money on all aspects of the business while the true value of the company, its real estate portfolio, steadily grows. The fact that investors decided they wanted to cash out should be a surprise to no one.
And this is exactly why I only shop at Costco. While other retailers try to get me to buy more stuffs, Costco try to make sure I'm satisfied enough that I'll renew my yearly membership (their main profit source). The incentive structure aligns very well.
Buying in bulk is about having the ability to both afford next week’s food this week and have the means to store it. Not to mention the annual subscription.
Responding to a comment about dollar stores preying on the poor with, “that’s why I shop at Costco” is… a choice.
The fact that the strategic wedge with which a successful, relatively socially-positive business manages to sustain itself isn't universally accessible doesn't negate its value.
The Venn diagram between people who shop at dollar stores and people who shop at Costco isn't empty.
This is true, but a valuable - and damning - observation that this variation in business model, that seems to be both decent and profitable, is so rare
Indeed. And I say this as Costco member. There are lot of factors that make Costco memberships work. And a lot of people won't be able to make much benefit out of Costco membership.
I say this as someone who admires their business model and how they treat customers & employees: your typical Costco experience is drive to the suburbs, spend $500 and load up your car with nice to have food products and discretionary purchases. Poorer people cannot do any of these things.
>While other retailers try to get me to buy more stuffs, Costco try to make sure I'm satisfied enough that I'll renew my yearly membership (their main profit source). The incentive structure aligns very well.
This doesn't make any sense. Costco makes a profit on the goods sold as well. They have every incentive to sell you as much stuff as possible. That's why they also engage in the usual retail tactics to increase sales, like having the essentials all the way in the back of the store, and putting the high margin items (electronics and jewelry) in the front. They might practice a more cuddlier form of capitalism than dollar general, but they're still a for profit retail business.
I see you're not terribly familiar with Costco. Membership fees account for the vast majority of net operating income for Costco and they keep markups on items at no more than 14% over cost (15% for Kirkland brand).
So yes, Costco does make most of its profit by ensuring customers are happy and continue to renew their memberships every year.
>Membership fees account for the vast majority of net operating income for Costco
This is financially illiterate because you're mixing revenue ("membership fees") with profit ("net operating income"). While it might be tempting to assume that membership fees is pure profit for them, it's not, because people only buy memberships because they're useful for something (ie. shopping at their stores). Therefore you can't strip that out from the other costs associated with operating a chain of warehouses.
It’s kind of a meme; Costco’s profits are almost exactly the same as their total revenue from membership fees, which leads people to think that the warehouses run at zero margin and the fees are their only profit source. The fees certainly give them room to run the sales at extremely low margins (though large grocers like Kroger only have something like 3% margins), but it wouldn’t take a huge shift in purchasing patterns to change this coincidence. If all the people who don’t use their membership that much dropped them and those who use them were all large-scale buyers, they would have to increase their prices just to give themselves a bit of cushion.
>It seems to amount to a similar principle, that their business model depends on repeat customers, and would fail if they lost trust.
You think dollar general is making $37.9B (in 2023) of annual revenue from one-off customers? Unless you're operating a tourist trap, or some sort of business that people only need a few times in their lifetimes (eg. real estate agents), most businesses rely on repeat customers.
Dollar stores around here pop up in small towns, killing off any locally-owned competition, and are far enough away from the big chains to mean they can charge quite a bit more while offering terrible service.
The sad thing is, people in rural areas that depend on places like Dollar General, and are getting fleeced blame everyone but republicans and they are usually in red areas
I live in a rural area with a Dollar General about a half mile from my neighborhood. For staples, it’s honestly fine. You want a 6 pack and some hot dog buns because you missed it in the Wal-Mart run the other day (15 miles away), it’s great!
You’re not getting fleeced and if you are, the gas savings alone more than make up for it (0.65 per mile per the IRS.)
For folks who depend on the local DG for, idk, clothes and household goods it might be much worse, I don’t shop for those there ever, but on staples it’ll do, especially given the density of stores compared to major chains.
Being in a shopping rich area, I have some luxury of choosing what I get where. DG is a good option for a small list of items, about ½% of my shopping.
But it'd be awful if my best shopping option was 15mi away.
Having moved from a shopping rich environment of some 30 years to a very rural setting, I was innately trained to hate on Dollar General by my 15 years on HN. In reality, it’s a trade off. Nothing more, nothing less. Whereas before you might have fallen back on a country-store with a small kitchen and minor staples (eggs, cheese, milk) next to the RedBull most folks now have a wider variety of options at a price point comparable to or better than that filling station. All the better, DG has rolled out their “Market” concept with fresh options as well.
At this point I’d love to see a conversation about price points and convenience of a Japanese conbini as compared to a Japanese supermarket on HN. Far less politicized and denigrated I would hope.
> But it'd be awful if my best shopping option was 15mi away.
In much of the rural US, 15mi away is having your good shopping close by. A lot of areas make due with their "best shopping option" being well more than 15mi away.
The concept of "small convenience store near me" isn't the problem. The problem is that these stores are actively engaging in outright fraud. People who shop there are absolutely getting fleeced regardless of how much gas they burn getting to the store that's regularly ripping them off.
Having a small nearby connivance store and not getting scammed is an option. If the ability to get beer and hot dogs buns without having to drive to a larger more distant store is really worth the higher prices customers are getting fraudulently charged at the register, then these stores can just stop lying to customers and post the accurate prices.
If the laws were meaningfully enforced this is exactly what would happen. These stores would either comply with the law and stop committing fraud or they would be shut down, their CEOs would be sent to prison, and competitors willing to follow the law would step in to fill the need the market has for a small shop that sells beer and buns to rake in that profit for themselves.
> Dollar stores are private equity with a checkout lane.
Dollar Tree and Dollar General are publicly traded.
So Family Dollar might be the result of PE tactics, but the other two aren't, and Dollar Tree sold Family Dollar because they saw it as under-performing.
It's actually sort of weird Dollar Tree couldn't make it work. I know the dollar stores all have somewhat different businesses, but you'd think that Dollar Tree could have either turned Family Dollar around or knew it was selling a loser (see the market for lemons) to PE.
> They already run on a thin-staff, high-volume model.
Like every other retail business not targeting the top 5%.
And Dollar Tree and Dollar General are both publicly listed companies, not private equity.
Dollar Tree sold Family Dollar for $1B 10 years after buying it for $8.5B, a pretty big loss. Dollar Tree’s market cap is $25B, so a pretty negligible part of the national dollar store business is “private equity”.
Costco purposefully targets the upper middle class to nearly the point of exclusion of everyone else. By charging membership fees, product selection, and the bulk pricing.
They could care less about the bottom 50% of the market.
Costco's revenue comes from their membership fees and their ability to strongarm suppliers to give them favorable terms (eg. Costco is one of the largest alcohol importers in the US and tends to strongarm LVMH).
I love Costco (I practically grew up at Costco as a kid), but their ICP is not the kind of person who shops at Dollar General or is on SNAP - it's very much targeted at the 50th percentile income bracket and above [0].
And this is why PE has taken over the dollar market segment - because it's a trash business that no one else wants to service over the long term. PE is basically the last resort if a business cannot raise capital from traditional avenues, and leadership and investors want to exit. For y'all graybeards think of "Sam Vimes Boots theory".
Mine Safety Disclosures did a great overview on Costco's operating model a couple years ago [1].
You’d have to explain why you believe that. Just because someone in poverty can afford to purchase items in the store, doesn’t mean it’s good value, i.e. it’s not necessarily providing relief from poverty. In fact, it’s the opposite. See e.g. “How the dollar-store industry overcharges cash-strapped customers while promising low prices”:
Interesting. The Netherlands is no class society so rich or poor nobody has any goddamn shame to stand in line at the Action checkout if there's a good sale to be had.
Seeing people in BMWs at the Aldi parking lot. Strange country.
I do most of my grocery shopping at Aldi (in the US). There’s plenty of Teslas, BMWs and Mercedes in the parking lot (although late model Hondas, Toyotas and Kias are probably the most prevalent). Turns out people of all income brackets like saving money.
Americans used to claim this too. It’s invariably false. It just means that the wealthiest people do a better job of concealing, or not advertising, how vast the wealth discrepancy between them and the average person is.
> Seeing people in BMWs at the Aldi parking lot
The least wealthy person on the list at https://en.wikipedia.org/wiki/List_of_Dutch_by_net_worth could afford 10,000 high-end BMWs and still be extremely wealthy, far too wealthy to have any interest in lining up at Aldi’s for a sale.
> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50. Kellogg’s Frosted Flakes, Stouffer’s frozen meatloaf, Sprite and Pepsi, ibuprofen, Klondike Minis – shoppers were overpaying for all of them. Pedigree puppy food, listed at $12.25, rang up at $14.75.
Surely, now that this made the news, there will be an investigation into the fraudulent behavior of Dollar General and Family Dollar.
Left unsaid is that both Dollar General and Family Dollar would become unprofitable if they stop tricking customers. (Both companies typically earn only 3-4% on sales.)
It was investigated, the issue is that the fines are smaller than the profit. I would personally want to see things like this considered fraud and that it can result in prison sentences for executives and other people invovled in the decision making.
Ya the problem needs to be a fine the first time, second time it’s fraud. Allow for honest mistakes. Punish for clearly defrauding customers. We really need jail time for execs making these decisions but that rarely happens.
Some people say it's trickery, but when I apply the razor I find pricing errors more likely to be the result of stupidity than of malice.
Having worked in retail myself, I understand that some days there just isn't time to get it all done. A debt of unfinished tasks can accumulate. It happens. Sometimes old prices get left up. (I think the stupidity is on the part of management more than it is the employees, but it's still more stupid than it is malicious.)
---
Dollar General got into the thick of it with the Ohio Attorney General a couple of years ago[1] over this issue: The prices on the shelf didn't always match the prices at the register. Stores were closed[2] while they updated their price tags to match reality.
And as part of the settlement with the Ohio AG: Nowadays, when I go into a Dollar General and Red Baron pizzas are on the shelf for $5 and they ring up at $7.65, they're required to honor the posted price of $5 when I bring this up to them.
(That last bit really should be enshrined in law instead of the footnotes of a legal settlement with a single entity, but alas: It just isn't that way in Ohio.)
I would like to think incompetence as well, but when the problem is this widespread, IMHO it does point to a corporate issue...even if that's simply leaving too many incompetent managers in charge. IMHO if you're the manager and the part-time teenager didn't finish updating all the shelf pricing, then it's on you to finish before going home. But today too many people just don't give a damn.
My first job was in retail as well, going back to the days before scanners when every item item was ticketed individually. When something goes on sale you ticket it again, then tear off the sale price stub when the sale ends. Repeat as needed. Maybe that could be a suitable punishment, too? Force stores to abandon shelf pricing for a period of time until it hurts enough that they get their act in order?
Hanlon's Razor is not relevant with large amounts of money at stake. in fact the complete opposite is the best approach: The more money that's involved, the more you should suspect malice until it has been conclusively ruled out.
As a company seeking to maximize profit, why would you fix this problem? It seems optimal to say "it's out of our control" -- you get to overcharge customers, and you have a reasonable explanation if a lawsuit comes.
I would be curious to see how often it's the other way around, e.g. they undercharge a customer.
I prefer to think that people (including those who run corporations at the level of -- you know -- price tags) are broadly more incompetent than they are malicious, dishonest, replete scumbags who would sooner stab a person in the back and take their wallet than give them the time of day.
You're applying that razor incorrectly. These dollar stores are run with a skeleton crew, where it's impossible for the workers to keep the store in order, or to update the prices on the shelves. The prices of items at the register is managed centrally. They ensure resources exist to increase prices at the register and not on the shelves, and that's misleading and fraudulent.
This isn't a pricing error. They should change their practices to require prices be updated on the shelves, and for that to be verified, prior to the prices at the register applying (and this should be required by law).
It's funny that it's criminal when someone shoplifts from a dollar store, but knowingly showing one price and charging a higher price isn't a crime. We need to start treating corporate theft as crimes, rather than as a cost of business.
This is very American: it's illegal, but everyone accepts both that the law will be enforced very unevenly, and that this kind of thing doesn't get solved by the regular political process. There's no political consumer complaints culture, it's seen as an individual matter.
You couldn't get away with this for as long in the UK as a retailer. Either the CMA or Trading Standards would deal with it.
> everyone accepts both that the law will be enforced very unevenly, and that this kind of thing doesn't get solved by the regular political process
Nobody agrees on that. TFA follows "a state government inspector" whose effectiveness is hampered solely by a "North Carolina law" which "caps penalties at $5,000 per inspection." That law [1] doesn't exist outside North Carolina.
This is the first time I'm reading about this. We have a dollar store in my town. I'm curious to replicate this experiment myself and send the results into the local newspaper if the discrepancy is real.
> this kind of thing doesn't get solved by the regular political process.
Yeah it does. This is specifically the sort of thing that the FTC is in charge of addressing.
That is ultimately controlled by who the president is. There is some funding problems with these enforcement agencies that forces them to pick and chose their battles. However, you'd be naive to think that there isn't a significant difference from how Lina Khan ran things and how Andrew Ferguson runs things.
Keep in mind, this is also a state thing. I live on the NC/SC/GA border so I view news for all three daily.
I routinely see this type of crime heavily policed and reported on in NC. Whereas my entire life is in coastal SC and never once in my life saw this repeated on or enforced.
In Massachusetts it's policed and enforced but the maximum fine per inspection is $5000 so it doesn't actually do anything (and it only applies to food anyway and stores are also allowed to exempt a fairly large number of items). https://www.mass.gov/info-details/accurate-scanning-and-pric...
Their attorney general could also sue them, as was done in several states mentioned- resulting in much larger settlements. Only the fines by the dept of weights and measures are limited.
Paying 10 to 20 cents more for an item can still be a better deal than traveling further away to a larger store. The mis-pricing is completely unacceptable, though.
But because these stores exist, they lead to grocery stores no longer existing, because they eat the majority of the profit from grocery stores. This forces people to shop at the dollar stores because it's the only thing nearby. The dollar store model increases prices, reduces consumer choice, and makes us less healthy.
It's worse than that. In many cases the dollar stores now get skus of items made for them that are "cheaper" than a sku in Walmart but for a more expensive unit price than Walmart as they shrink the product.
> Left unsaid is that both Dollar General and Family Dollar would become unprofitable if they stop tricking customers. (Both companies typically earn only 3-4% on sales.)
They could of course show the actual prices instead of tricking customers?
If the margins are so low nobody else will be significantly cheaper anyway.
Massachusetts has a quite prominent law against this.
"When buying groceries—food and non-alcoholic beverages, pet food or supplies, disposable paper or plastic products, soap, household cleaners, laundry products, or light bulbs—you must be charged the lowest displayed price, whether on the sticker, scanner, website, or app.
If the lowest price you saw for an item is $10 or less, and that lowest price is not what you were charged or not what appeared on the in-aisle price scanner, the first item should
be FREE.
If the lowest price you saw for an item is more than $10, and that lowest price is not what you were charged or not what appeared on the in-aisle price scanner, you should receive $10.00 off the first item."
Not to say it's not happening in a Mass based Dollar Stores but you could be walking away with a lot of free stuff and it would be enough of a deterrent to stomp out the practice. I've had it happen at grocery stores usually at their suggesting.
Unfortunately, this type of conflict can only be adjudicated by courts, which low-income people don't have the time and money for. You couldn't just walk out of the store with the items. You'd need to either:
1. Buy the items and sue.
2. Take the items without paying, likely get the police called on you, and defend yourself in criminal and civil court.
3. Point at the sign, which is posted at every register, and ask for your discount. If they say no you ask for the manager. I've done this several times, and never had an issue (but sometimes it takes a little while).
Theoretically there is a third option, stay in the store near the cash register and call the police to come deal with it on the spot before the purchase. The problem is that they probably won't bother coming, and if they do, they won't come quickly enough to make it worth waiting for them given the amount of money at stake.
Edit: Yeah, I did say before the purchase, but I should have said after the purchase when they pay the legally correct price but the store accuses them of shoplifting and tries to detain them. And I know it's often infeasibly hard to pay the legally correct price from a logistical perspective without the cashier's cooperator, especially if you want to pay with a card. It is clearly possible to put at least the right amount of cash on the counter, ask for the change, and attempt to leave if they refuse, but that doesn't guarantee ever getting the change. Anyway, I did list this option as (purely) theoretical and not as actually practical.
In a lot of places in the US, the lower of the shelf price and the scanner price is by law the most they can demand, at least for retail sales to consumers. Attempts to stop the customer from leaving after having paid the legally appropriate amount would be criminal acts by the store, no?
I did call it a theoretical option and not a practical option. Although they might be a little more sympathetic to someone who is white, in a business suit, has a photo of the shelf price on their phone, can confirm that a surveillance camera captured them paying the shelf price, and is lucky enough to either get a cop who knows about the local price accuracy law or can point the cop to a visible posted sign about the law in the store.
Not to mention that cops only have powers to arrest/issue tickets, not to adjudicate disputes. This isn't Judge Dredd where cops can mete out judgements as they see fit. That's the whole reason why we have courts and judges.
It's not about adjudicating disputes in an arbitrary sense, it's about enforcing consumer protection laws about prices displayed and then charged at retail. Many places legislate that the lower of shelf or scanner price be the maximum price charged.
>It's not about adjudicating disputes in an arbitrary sense, it's about enforcing consumer protection laws about prices displayed and then charged at retail.
This is a fundamental misunderstanding of how the legal system works, at least for common law ones. When cops "enforce" the law, like arresting someone or towing a car, they're only allowed to do it because there's some immediate need. In the former case, it's because having a criminal roaming around the streets is a danger to society, and in the latter case because the car is blocking traffic and needs to be removed. In both cases you still need a judge to ruled that the person actually shoplifted or parked illegally. None of these factors apply in a dispute over pricing, and it's not the police's job to strongarm the shopkeeper to accept the lower-marked price. Indeed, in the two examples, there are often cases where no actions are taken at all, for instance issuing a summons instead of arresting someone, or issuing a ticket instead of towing a car.
> When cops "enforce" the law, like arresting someone or towing a car, they're only allowed to do it because there's some immediate need.
Not at all true. They can enforce the law because there's a law being violated, not because there's an immediate need for the enforcement.
> In the former case, it's because having a criminal roaming around the streets is a danger to society, and in the latter case because the car is blocking traffic and needs to be removed.
There are so many cases where cops can arrest someone who isn't being a danger to society in any way, like someone who illegally crossed the border into the US (a criminal misdemeanor) and is otherwise fully law-abiding. Or for an example under state law, a cop arresting someone who is intentionally underpaying state income tax (criminal tax evasion) has no immediate need to take that person into custody before conviction but is 100% allowed to do so if probable cause exists, at least until the initial bail hearing.
> In both cases you still need a judge to ruled that the person actually shoplifted or parked illegally.
Not before a cop gets involved, no. The judge comes after the cop.
> None of these factors apply in a dispute over pricing, and it's not the police's job to strongarm the shopkeeper to accept the lower-marked price. Indeed, in the two examples, there are often cases where no actions are taken at all, for instance issuing a summons instead of arresting someone, or issuing a ticket instead of towing a car.
This has nothing to do with strongarming the shopkeeper to accept a lower-marked price in the sense of an ordinary pricing dispute between private parties, it's about enforcing state or local laws that regulate this in cases where a shop is violating applicable laws.
It is true that many of these laws only allow administrative fines in response to complaints or inspections, not anything as proactive as I was describing. The theoretical viability of my idea of simply leaving with the item after paying the legal maximum price at the cash register and involving the cops if stopped actually depends on state contract law, and likely specifically its judicial precedents: if that state would view the buyer's offer to buy at the shelf price as accepted on the terms of the store's invitation to treat since the counteroffer from the cash register's scanner was illegal, then title transfers to the buyer at the time of payment and an attempt to stop them from leaving would be a crime that the cops could in theory be called for. If the state would view the buyer's offer to buy be rejected even though the counteroffer was itself illegal, then yeah the only available enforcement is the administrative complaint / inspection / fine procedure and the buyer never gains title to the property. I expect this legal conclusion would vary from one state to another.
I think we all agree that this theoretical option is very rarely practical, and I'm not pretending otherwise.
>There are so many cases where cops can arrest someone who isn't being a danger to society in any way, like someone who illegally crossed the border into the US (a criminal misdemeanor)
Does only committing a "criminal misdemeanor" somehow exempt you from arrest?
>Or for an example under state law, a cop arresting someone who is intentionally underpaying state income tax (criminal tax evasion) has no immediate need to take that person into custody before conviction but is 100% allowed to do so if probable cause exists, at least until the initial bail hearing.
Right, because arresting people who refuses to show up to court is needed for the justice system to work at all. Otherwise people can just shirk their court dates and never face judgement. There's plenty of other reasons to arrest people besides the two examples I provided, they're not supposed to be exhaustive.
>This has nothing to do with strongarming the shopkeeper to accept a lower-marked price in the sense of an ordinary pricing dispute between private parties, it's about enforcing state or local laws that regulate this in cases where a shop is violating applicable laws.
This makes as much sense as calling in the cops to report health code violations.
> Does only committing a "criminal misdemeanor" somehow exempt you from arrest?
It does not - and that's exactly my point! Cops are allowed to arrest that criminal even though there's no immediate need to arrest them. So, immediate need is not a prerequisite to cops arresting someone.
> Right, because arresting people who refuses to show up to court is needed for the justice system to work at all. Otherwise people can just shirk their court dates and never face judgement. There's plenty of other reasons to arrest people besides the two examples I provided, they're not supposed to be exhaustive.
Yes, but cops are also free to arrest people who they are confident will show up to court, if there's probable cause that they've committed a crime. Again, the point of that example was that immediate need is not required before a cop can arrest someone.
> This makes as much sense as calling in the cops to report health code violations.
I agree that it would be best if there were a separate agency that could respond on the spot for this type of issue, other than the regular police department and other than a slow administrative complaint/inspection process which doesn't lead to enough of a fine for stores to change their processes.
But I was discussing the possibility of the sale completing according to the law and the store trying to stop the customer from leaving with their purchase because they didn't pay the illegal overcharge. That would indeed by a crime attempted or committed by the store, assuming the law considers the sale to have been completed, and that is indeed something within the scope of what cops can handle.
To use your health code analogy: sure, in general, administrative complaints are the way to handle health code violations. But what do you call it if a restaurant worker sees something which they know or reasonably should know is toxic to humans spill into a customer's order, and then they serve it to the customer anyway without a warning? Yes, that's a crime as well as a health code violation. There are plenty of cases where cops can legitimately be involved in things that can also be handled administratively. Whether or not cops are likely to respond in useful or timely ways is a completely separate question from what the law allows.
(Tangent: Cops also quite often handle administrative fines of even smaller magnitude than what we're discussing here, but usually when the aggrieved party is the government and the wrongdoer is a random individual, like issuing non-criminal $60-100 fines for not paying a public transit fare of a couple of dollars. It's rare for them to do it when the aggrieved party is a random individual and the wrongdoer is a business.)
Call the police to stop a store from criminally restraining the freedom of a customer to leave with their purchase after the customer pays the legally mandated maximum price which is often the lower of shelf and scanner price, yes. That's not going to be a high enforcement priority for the police, but it's absolutely a crime if the store does that.
>Call the police to stop a store from criminally restraining the freedom of a customer [...]
Realistically no store is going chase after the customer for that, but that doesn't mean the average shopper is going to risk arrest/banned (for what the store essentially sees as shoplifting) to send a $2 message over the price difference. And all of this assumes your novel legal theory is actually correct.
Your original idea of "paying the marked (lower) price, walking away, even if the cashier corrected you with the higher price" certainly is novel. Otherwise can you link any sort of judicial ruling or even a random lawyer that agrees with you?Otherwise this looks suspiciously similar to all the spurious legal theories that sovereign citizens have, about how they don't need a drivers license because they're "traveling" or whatever.
Similar laws exist at the state level in NY, in other NY counties, and in several other states and subdivisions of other states across the country.
In that case, the higher charge is clearly illegal (no novel theory needed), so standard contract law theory could consider the terms of the buyer's offer to purchase to be the terms of the invitation to treat in the absence of legal contrary terms offered at checkout. I guess it's possible that the court would say that the store never agreed to sell the item at all by demanding an illegal price instead of being considered to have accepted the buyer's offer on the posted terms, but there's only so much tolerance a judge would have for that kind of defense by the store - after all, it's very likely that the customer would have an unjust enrichment claim against the store for the amount of the overcharge if they were to pay the illegal higher price, and that wouldn't be true if the illegal contract term were valid.
The precise answer may vary by state based on judicial precedents about illegal terms in contractual counteroffers following an offer to buy made pursuant to an invitation to treat.
None of this is practical for almost any chain dollar store overpricing victim to pursue, but I am just talking theoretically here.
If you walk out and it goes to court you will surely lose. You may have started with the right to get it for nothing but you cannot realize that right by force. Self-help is almost always illegal in any case of disagreement between parties.
> Unfortunately, this type of conflict can only be adjudicated by courts, which low-income people don't have the time and money for.
Here in Europe, we have consumer protection agencies. Get wronged? Shoot them off an email and they'll take care of it. And overcharging at the cash register? That gets handled by the responsible authorities. Again, call them, tell them what happened and it can get real messy real fast.
I was having trouble getting Verizon to unlock an iPhone that had been purchased (not financed) from Best Buy and that had been on Verizon's network for more than two years. Verizon support said only BB could unlock it[^1]. I thought that was poppycock. I filled out a form on the FCC's web site just before midnight. By 8 AM, the FCC had forwarded the complaint to Verizon. By 9 AM Verizon executive relations called me. 30 minutes later the phone was unlocked.
Which is all to say, for some things, the US also has consumer protection and it's great when it works.
[^1]: Apparently only Apple sells unlocked iPhones. iPhones purchased at other retailers carrier-lock themselves at activation. At least on Verizon they're supposed to automatically unlock after 60 days. When that doesn't happen, you get stuck in Verizon's mindless customer support swamp[^2,^3].
Yeah, I've had a similar experience with a phone company trying to hold a number hostage. Yes, the bill was unpaid, but I was not the one liable. (My phone on a company account, the company was going under.) Letter to the regulators, very promptly fixed.
Not only that, but they post a sign about this at every register. (That must be required.) So you can point to the sign. I think a typical store manager would comply. Maybe I'm not cynical enough.
Yup. My local Star Market was pretty bad about this, so I started paying close attention to prices on the shelf and at the register. Pretty soon I was taking home free items every shopping trip. (I also reported them to Inspectional Services when aisle scanners were broken or prices were particularly egregiously missing or wrong.)
Some of the cashiers had to have it explained to them with much pointing to the sign that hangs on every register; others knew the drill and called a manager over right away.
After about 6 months they started shaping up. Maybe the store manager got fed up, or maybe corporate stopped having them skimp on sticker hygiene.
From the article:
> In one court case in Ohio, Dollar General’s lawyers argued that “it is virtually impossible for a retailer to match shelf pricing and scanned pricing 100% of the time for all items. Perfection in this regard is neither plausible nor expected under the law.”
...but in my experience, they're perfectly capable of doing the right thing, given appropriate incentive and enforcement. In particular I noticed that this really varies from store to store, even in the same chain.
> ...but in my experience, they're perfectly capable of doing the right thing
It's both true. Given that a typical store can have thousands of SKUs displayed, mistakes will _always_ happen once in a while. A forgotten price tag, an incorrect sale price, etc.
But at the same time, stores are more than capable of having a system to _fix_ these issues as soon as they are detected. It doesn't even take much, just a way for a cashier to flag an inconsistent price for someone at the back office.
So this means I would get the app-only sale price, without using the app?
While doing some research into state retail pricing laws a few years ago, I discovered how tough Massachusetts is, being one of the last holdouts mandating ticketing on all items, and only relenting in exchange for price scanners every so many aisles. Living in Pennsylvania and annoyed by stores tying their best prices to their apps, I fancifully emailed Elizabeth Warren, asking if she'd prod a friend in state government to consider a legislative end run around apps. I had no idea such a law really existed. "First in the nation" I expect. Wonder how long it's been around?
> But North Carolina law caps penalties at $5,000 per inspection, offering retailers little incentive to fix the problem
This is a huge problem with all manner of laws in the US. We are not willing to insist that fees be limited only by their ability to prevent the prohibited behavior. Fines should continually escalate, if necessary until the offender is bankrupted, at which point their assets are taken. If Dollar Tree keeps doing this, the fines should eventually reach into the hundreds of millions of dollars, even the billions. Such penalties should also apply to company executives and board members who are responsible for the company's overall conduct.
It is important to understand that Dollar General and Family Dollar serve thousands of flyover communities where there are no Walmart stores or other viable market access. Dollar General has stated that it can generate profits in communities with fewer than 1,000 homes. Walmart generally requires a much larger population base for its stores.
Dollar General is the largest retailer in the US by number of locations, with over 20,000 stores across 48 states. Family Dollar operates over 8,200 stores. Walmart's U.S. store count is significantly smaller (around 4,700 U.S. Walmart stores and 600 Sam's Clubs as of 2024).
Dollar stores are frequently found at the heart of "food deserts," which are often rural communities located more than 10 miles from a grocery store selling fresh produce—a gap often created when a community is too small to maintain a supermarket or attract a retailer like Walmart.
I am not an attorney, but given that Dollar General and Family Dollar are highly likely to serve a much larger percentage of SNAP-eligible customers, isn't there a far more serious FEDERAL crime being perpetrated here of retailer abuse and fraud in the Supplemental Nutrition Assistance Program (SNAP), often referred to as food stamp fraud? That is, if the SNAP customers have no other means of purchasing food (living in a food desert), and the retailer is intentionally charging more for food items, isn't the retailer committing fraud against the US government? Federal criminal prosecution of SNAP violations could result in fines up to $250,00 and imprisonment up to 20 years. More significant consequences than otherwise being reported here.
In Australia, according to the Australian Competition and Consumer Commission:
- Businesses must communicate clear and accurate prices prior to consumers booking, ordering or purchasing. They must not mislead consumers about their prices.
- There are specific laws about how businesses must display their prices.
- Businesses must display a total price that includes taxes, duties and all unavoidable or pre-selected extra fees.
- If a business charges a surcharge for card payments, weekends or public holidays, it must follow the rules about displaying the surcharge.
- If more than one price is displayed for an item, the business must charge the lowest price, or stop selling the item until the price is corrected.
In practice, if the checkout price is more than listed price, many retailers give the item for free. It doesn’t stop dodgy constantly fluctuating ‘on sale’ pricing…
Requirements about surcharge notifications and displaying all-up prices are nice, but the gap here will still be about enforcement and not regulation. The core problem for dollar-store shoppers in the US is about getting the retailers to honor the sticker price, not whether the sticker price shows all state and local taxes.
Is the Australian shopper protected simply by a stronger culture of adherence amongst retailers or is it because regulators inspect more often and take stronger action against failures?
Regulators take tip offs and if one gets through, the enforcement action is usually pretty fast and strong.
They also like doing this. The ACCC makes a huge deal out of parading their latest conquest in the media.
Has its faults, the ACCCs dealings with telcos are especially terrible.
I still have friends at an Applecare provider based in oz, and they had a big one where as a settlement with the ACCC over trying to have it both ways with consumer law, they agreed to provide repairs or replacements for like a decade of wrongfully denied hardware issues. Hushed it right up. It was in lieu of a public apology from memory. But my friends spent weeks calling back old customers, chasing new contact details etc, to try and get them all free replacements.
I guess it might be a cultural thing? The shelf price is the binding price here in practice. If you get to the register at the supermarket and the price is higher, you can just let them know and they will send someone to check the price and match it.
Yes, seems to be partly regulation and enforcement partly cultural in a voluntary code of conduct that tends towards benefit to the consumer. For example,
[All the major grocery retailers] are signatories to the voluntary code of practice for computerised checkout systems in supermarkets. Generally, this means that if an item is scanned at the checkout at a higher price than it says on the shelf or as advertised, a customer is entitled to receive the first item free and all multiples of the same item at the lower price.
23% of items are rung up at a higher amount at the register than what it says on the shelf, yet North Carolina law caps penalties at $5,000 per inspection, offering retailers little incentive to fix the problem.
In other words, regulatory capture at its finest, over the backs of the poorest in the country.
Depending on how much independence the inspectors have they could probably turn a heck of a profit per inspector (thus being able to argue their continued existence to the legislature).
Could an inspector manage two per day? If you figure the full cost of each inspector is $150,000/year but dedicated ones could do 8 inspections at $5k each per week, there's well over $1 million/year per inspector (assuming not all inspections would be the full fine, there's travel costs per inspector, inspectors would have to spend some office/court time, etc. that would bring it down from the potential maximum of ~$1,800,000 each factoring in vacation and holidays).
Even Republicans could get behind it! "We're reducing the direct budget of the department, but authorizing it to hire additional inspectors in order to bring in additional revenue that can be utilized to bring the budget to or above its current levels." It's a cost reduction measure!
It’s not regulatory capture unless the regulatory body itself is controlled by shady grocers. This is just garden variety insufficient regulation. Although if they inspected every day it would probably still be profitable for the state.
While I agree, for the most part this comes under state regulations. Especially red states are always trying to cut taxes and the government at the cost of not having enough inspectors.
Seems like it actually creates an incentive to go big or go home. If you're already going to be busted and hit with the maximum fine, might as well have even larger mispricings, so you come out ahead after the fine is taken into account.
What this calls for is an Amazon-style optimization of inspections. Given X inspectors and Y locations, what is the most optimal routing to optimize for coverage and penalty collection?
In Australian supermarkets when the price of the item is wrong you get the item for free. (At least it was like that in 2011). Cashiers would run into the store to go fix the price tag.
Amazon-style optimization? You mean they send three different inspectors to the same store on the same day, each scanning one third of the necessary items for the audit?
Offtopic, but I made the mistake once of buying groceries from Amazon and they instead sold me a package of cheddar cheese that was completely blue from mold. Some "quality" inspections they got going don't bode well for public-private "partnerships" that outsource essential government functions to a corrupt third-party that's likely to be owned by a craptastic private equity hedge fund.
The error rate is nonzero, but in my experience Amazon will make it right with little friction. A short chat is almost always enough, no labyrinthine phone trees or escalations.
Last time I had to contact Amazon the chat option was no longer anywhere to be found. I gave up and actually called. They were nice enough on the phone but it was a good reminder of how much Amazon’s customer service has degraded.
Yes, but all problems with tainted food are not as visually obvious as mold. After some bad surprises, I've decided to never eat anything I ordered from Amazon.
> yet North Carolina law caps penalties at $5,000 per inspection
So, have every agent in the state inspect them. Fine 5k. Immediately inspect again, different goods. Fine another 5k. Keep doing it opening hours.
Treat them like an inspection money piñata until they fix their ways. State gets a big pile of money to do better, and massive fines at 5k a pop for a few weeks punish the company and their bottom line.
Why are we taking this whole “the $5k fine is nothing” thing at face value?
A long time ago I used to help manage a couple retail stores. A $5k random expense would have put that location into the red for the month. Perhaps not the volume of a dollar store chain, but certainly not small either.
I have a feeling that if the $5k fines were basically guaranteed to happen with some regularity you’d see this cleaned up pretty quickly with local management replaced ASAP if not.
Enforcement doesn’t have to be over the top abusive with the goal to put a location out of business overnight. Especially in already underserved communities. Like everything to do with humans there simply needs to be consistent, reliable, and timely consequences to form a reliable and immediate feedback loop for behavior.
If a store makes it an actual policy to eat these fines then the fine amount needs adjusting. From everything in this article though the problem is simply it’s worth the gamble they don’t happen at all.
I mean, more like someone elected and really high up in the state government calls the inspection office and tells them to stop, or everyone at the inspection office will get fired, since said elected person cares far more about getting reelected then the people that they should be representing.
I don't know NC law. Does it have an "invitation to treat" practice there where prices marked are a customer relations issue rather than a legally-binding offer?
To attain change, enough people have to:
1. Correctly identify the source of their misery, because it ain't [insert scapegoats].
2. Find others who agree with them.
3. Make a plan for effective countering of 1.
4. Use intestinal fortitude and endure temporary setbacks to achieve 3. to overcome 1.
5. Prevent 1. from ever happening again structurally, culturally, and through vigilant participation.
The 0th problem is the political operating system is captured by criminals and power has centralized grotesquely in ways that defeat the fundamental function of separation of powers. All elected officials corrupted by lobbyist bribes need to face accountability and have a code of ethics and integrity, because continuing down this path is the road to ruin.
I don't think the laws of the specific jurisdiction matter. In every US jurisdiction, the prices aren't completely legally binding (what if the previous customer changed the price tag?). In ~every US jurisdiction, if you systematically show one price but charge customers another, that's an offence.
So intent matters. What would decide an individual case is not the exact characterisation of the laws on the books, but how sympathetic a regulator or a judge is to the supermarket's claim that these things just happen sometimes.
If another customer changed the price tag, that would be in the same category as if a person unaffiliated with the store said "I'll give you a deal on this item for $10", then pocketed the money while you walked out with the (still not yours) item. This doesn't really have any bearing on whether the owner of a store putting up a sign with a specific price for a specific item that a customer can directly take possession of constitutes a binding offer.
Sure, but it's in the same category as the owner putting up a sign by mistake, or omitting to update a sign by mistake. Or more realistically, an employee of the owner putting up a sign even though the owner had instructed him to put up a different sign.
No, in this case the shop is legitimately offering an item for sale, and then forgetting to change the price they are offering it at. It's quite disingenuous for a shop to put up signs, and then act like those numbers aren't legally binding, while the real prices are hidden away in a database somewhere. If they want to have their database be the authoritative copy pricing information, then they can just not put up price signs to begin with.
> NC law. Does it have an "invitation to treat" practice [...] rather than a legally-binding offer?
Are there any common-law jurisdictions in the world where having products on sale in a supermarket is not generally considered invitation to treat but as an offer to sell?
The invitation to treat is the store inviting potential customers to treat (engage in commerce) with the store by submitting an offer to buy the displayed items at the listed price, which they usually do by bringing the items to the register or (for more specialized purchases) telling a store employee that they want to buy the item. When the buyer makes the offer, the cashier accepts the offer on behalf of the store by ringing up the purchase, and the buyer performs their end of the contract by paying the price, thereby contractually gaining ownership of their purchase.
One reason it works this way is that treating displayed items as an offer to sell would leave it unclear to whom the offer to sell would be made. Clearly each item on display can only be sold to one of the many shoppers who sees it, so they can't all be offered the sale. There are several other reasons too, like different customers being offered different terms of sale based on loyalty program membership, promotions, student or senior discounts, etc.
As the article says, the term in various US jurisdictions may be slightly different, like invitation to bargain, but the basic concept is the same. (I'm ignoring Louisiana entirely, which has a completely different legal tradition not derived from English common law.)
Regulatory capture is when a large company encourages stronger regulations that small competitors cannot afford to satisfy. Here the issue is regulation that is too weak, not too strong.
No, that’s just one form of regulatory capture. If this legislation is a result of lobbying from retailers opposing imposing meaningful fines, particularly if the state of things before its adoption was that penalties from failed inspections were often higher, then this is regulatory capture.
When I worked grocery retail when I was a teen 20ish years ago, any time a customer disputed the price of something during checkout, we’d have someone check the shelf and find the display tag. If the price was lower as the customer suggested, we’d always give them the item at the price listed on the display tag. An employee usually just missed that tag during price change day.
It’s so foreign to me that any retail place would defer to “the computer” if display price and database price were out of sync.
Even young-me understood the idea of “oh yeah, our bad, have it at the lower price” and the potential for legal action if we did otherwise.
Yeah, that "computer error" explanation is bullshit, probably rooted in a combination of CYA and narcissism.
When I worked in retail, we only had one database of pricing. The shelf tag and sign printers, the registers, the whatevers -- they all used that same database. If a shelf tag was printed at the same instant that an item was rung up, then they'd have had the same exact price.
There's mechanism for the prices to deviate.
(And yeah, pricing errors still happen at least because people are people. We make mistakes. We forget shit. We can even convince ourselves that we did a thing even if we didn't. We err. Even if we're absolutely honest with ourselves and others, we can run out of fucks to give. It's all part of our condition.
But of course: When a price was posted wrong then we fixed it once it was brought to our attention. The customer got the price that was posted, and the posting was changed.
For my own purposes, I had a habit of pulling the incorrect price tags and taking them with me back to the register; I'd just give them to whatever manager when they would show up with the key that was required for precise price adjustments and get back to doing whatever it is that my primary job was at the moment...which, if I were handling a register, meant something other than printing shelf tags.)
I noticed my local wal mart doing this, not on every product, but more than one. I had hoped it was an honest mistake until it happened on my next visit. I told an associate about it, left my groceries, and I haven't been back. It's wild to think that a few decades ago they accepted returns of any product based on trust, no questions asked, regardless of whether you had a receipt.
If the goal is to fix the behavior instead of just documenting it, the penalties need to escalate with repeat violations. The first mismatch can be treated as an honest mistake. But when the third or fourth inspection still shows the same pattern, the fine shouldn't be the same $5k: it should jump sharply. At some point the cost of ignoring the problem has to exceed the profit from letting it continue.
Right now the incentive structure is backwards. As long as the downside is fixed and small, large retailers will keep treating it as business-as-usual. A tiered system tied to repeated violations would at least push them toward actually fixing the issue, instead of just shrugging it off every time they get caught.
Even if they accurately charged shelf prices, these places are still a ripoff targeting the vulnerable. The list price is low but the per-unit price is astronomical compared to grocery store prices.
While that can be bad, sometimes you come out ahead after accounting for spoilage, time, and travel.
Sometimes I pay higher unit prices at a dollar store intentionally because they offer smaller package sizes not offered elsewhere and I only need the smaller amount. I could get a much better unit price at another store but would waste the rest of the product.
If I'm going for a multi-day stay somewhere and I don't want to deal with annoying mini bottles of hotel soap, I'll just pop into a Dollar Whatsit for a small bottle of something suitable at my destination.
I lived for an entire year out of just Dollar General and Dollar Tree. In some rough areas they are the only stores where you can buy groceries, so they have very clear monopolies. There are good value products, and like everything these days you have to use their apps to get the best offers. Also, the Dollar General app lets you check the price of everything before you take it to the counter. They regularly have items marked up at 1 cent.
I've been able to find good deals on some things at Dollar Tree. Usually the good deals were a smaller quantity of a normal-quality brand-name item. I mostly avoid the substandard quality items. But even sometimes substandard is OK if, say, you want to make your political demonstration sign on white foamcore (much cheaper than the art supply store, and you don't care if it's smaller, thinner, or outgassing) rather than on an Amazon shipping box.
There was a Family Dollar across from a large public housing project here, where I also went looking for deals, but the shelf prices looked like a convenience store. I didn't find out whether they were fraudulently charging even more at the register like this article describes. (I hope it closed because the residents knew there was an affordable Market Basket a 20-30 minute walk away, over the city line and train tracks, and they were able to get there and find the time for it.)
That's great, and a mix of all kinds of signs is to great effect. (People from all sorts of demographics using whatever means they can to be heard.)
Sometimes the sign-makers are artistically inclined, and may have access to better materials.
The most memorable example was at the political demonstrations (and counter-demonstrations) leading up to the Massachusetts constitutional convention that legalized gay marriage. For the State House one I photographed (learning photojournalism on the side), the anti-gay-marriage people were mostly bused in, including a pair of angry-looking old nuns in black full habit, and handed out the same ugly stock sign. (There's an obvious joke that they couldn't find a graphic designer who was sympathetic to the anti-gay cause.) Separated from them, across a street was a huge counter-protest, with an ocean of all sorts of creative, colorful, and positive handmaid signs, held by generally good-natured and thoughtful looking people.
Saying it only targets the vulnerable because of high unit prices is like saying the local gas station is a rip off that only targets the vulnerable because prices are higher.
I lived in a city that’s in North Metro Atlanta (Johns Creek) where the median household income was $160K. There was a Dollar General right by a Publix. People still went in the Dollar General for little things where the small packages that you could buy was feature and not a bug.
We still stop by the dollar store for snacks sometimes because it is convenient just to get things to pack for a flight. It’s especially popular for tourists in Orlando where I live
There is one near Naples in Florida I go to often just for the insane drink discounts compared to the Publix or Wawa or the Walmart Neighborhood Market thing across the street.
Have you ever been to a dollar store? Its much cheaper for the same items than a regular grocery store. Also not everyone needs a Costco sized tub of mayo. You test it yourself go by a standard sized candy bar at safeway/alberstons and then at a dollar store. Bottle of coke. Birthday card. Better yet compare the cost spices. Try to buy bay leaves at regular grocery store for under $5.
Candy bars and soda sure whatever. Look at essentials. The dollar store near me charges $1.99 for 8oz of Tide, the Albertsons a single block further charges $9.99 for 84oz, the dollar store is over double the cost. It's the same story with soap, cleaning products, etc. A tiny container for cheap feels like a deal if you can't do the math, but it's not. Feel free to "test it yourself."
I'm lucky in that I have a real grocery store nearby to compare to. If you live in a food desert where these big chains have driven out all competition you wouldn't have a choice.
It's not only the math but access to cash. Families living paycheck-to-paycheck struggle to make long-term investments. Paying 5x for larger quantities may pay off in the long-term, but if you're struggling to make ends meet and stretch dollars today, it might be overwhelming.
There's variations in dollar stores, and in packaging, and deals, and everything else.
Let's play with Tide, and with Kroger and Dollar General just because those are the two retailers that are near to me. We'll do biggest and smallest, and start with the smallest.
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The smallest bottle of original Tide that the Dollar General near me has is 34 ounces for $6.00: $0.1765 per ounce.
The Kroger near me has a similar, but lesser, bottle as their smallest offering: 32 ounce bottles for $5.99: $0.1872 per ounce.
Dollar General wins on smallest.
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The biggest bottle of Tide at Dollar General is 115 ounces; regularly, $16.95 ($0.147 per ounce). On sale for $15.95 ($0.139 per ounce). With a $4-off digital coupon, $11.95 ($0.104 per ounce).
At Kroger: 132 ounces for $19.99 ($0.151 per ounce). (With a $5-off-of-$25 digital coupon if I feel like giving Proctor & Gamble even more of my money in one transaction.)
Dollar General also wins at biggest. They win at regular price, and today they also win at sale price.
shrug
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Convenience also has a cost. For instance: I ran out of cat food on Christmas Day. Everything nearby was closed except for a Circle K, so I walked over there to see what they had. And they had cat food (of course they did). I bought the smallest container of Purina dry cat food I've ever seen for ~$9.
That was a lot of money for such a small amount of cat food, but I was happy to pay it. They had the right product in the right place at the right time. (And most importantly, the cat was happy.)
Dollar stores are crowding out grocery stores in areas that only have the clientele to support one grocery store. They sell only higher margin, long shelf-life shit food, whereas real grocery stores have to carry produce which cuts into margins considerably cause it goes bad. So it's easier for them to stay open. And they create food deserts there. They are a fucking scourge for small towns.
Sounds like the grocery stores were not serving their customer base well if they couldn’t compete with “overpriced” dollar stores.
Carrying cost of produce does not add up. If produce is going bad at that spoilage rate the store management fucked up and didn’t order the correct amount of product for the location. You can’t wish your way into a product mix.
Nothing was stopping grocery stores from identifying this need. Pretending your customer base is more affluent than it is sounds like a quick way to go out of business to me.
Explain why rural customers prefer the dollar store to the grocery store? Are they just stupid and don't know what's best for themselves?
Perhaps the rural grocers are not carrying the appropriate product mix for their current (new?) customer base, and are overvaluing customer service?
I don't like it - but I also spend time in rural communities and see why these places beat the local grocers. They offer better value for the dollar. Often they are indeed cheaper on a unit cost basis, much less overall per transaction.
It's sort of like folks screeching about "food deserts" in urban communities I've lived in, thus enacting laws forcing fresh produce be carried by the local convenience stores. That produce simply rotted on the shelves since - surprise! - the local business owners knew their customer base better than a bunch of do-gooder ivory tower academics did.
You can make some strong cases for Walmart putting Main Street rural America out of business using predatory pricing schemes and the like. It's a lot more difficult for dollar stores.
They do not offer better "value on the dollar" they offer units that individually cost less but over a year of buying what you need to survive you pay more. That's how items are generally priced; smaller packages, higher unit price (as in, price per ounce).
You shouldn't say "screeching" if you want to be taken seriously, it makes you sound shallow and dismissive, incapable of understanding how your narrow outlook is not applicable in some situations.
Please, take even the most basic efforts to understand what people are talking about here instead of forcing me to shove information down your throat like you haven't learned how to use an internet search yet. You don't need my help, and nothing I can say will be more convincing than your own personal research.
Source that they are replacing grocery stores? Dollar stores are closing and not expanding
. 99 cents stores went bankrupt, rest have been closing hundreds of stores.
Also dollar stores carry produce just grocery at least largest ones do like dollar general. They are designed to compete against grocery stores and wallmart’s neighborhood markets.
There have been a few articles about this over the past couple of years, usually in reference to one study or another. Here's one that references a USDA study:
Spices might be the most universal ripoff anywhere in the US. You can get it so much cheaper either at ethnic stores, generic plastic bags at certain grocery stores in the ethnic aisles, or restaurant supply stores for spices that don’t have a short shelf life.
It’s so bizarre to me. At some point someone needs to do an in-depth expose on how this spice monopoly happened.
> The list price is low but the per-unit price is astronomical compared to grocery store prices.
The problem is, so is material cost and handling effort. Say, a 2 liter bottle of soda compared to 10x 200 mL. Same amount of soda, but more handling required for stocking, inventory management (aka, make sure there is no soda expiring on the shelf) and finally scanning it over the cash register, and more packaging material.
Larger units of anything will always be cheaper than small units.
This was not always the case. 30 years ago the customer base for bulk co-op places were lower-middle class/poor folks who had a decent amount of financial acumen. You'd go there with your own containers and buy staples by the pound. Or special order that 50lb bag of oats or flour for 1/4th the per-lb price of the local grocery store.
They slowly morphed into bougie health nut/conspiracy hippie stores during my lifetime. Closest thing I've found to what I remember them being are food service stores which tend to require a business tax ID to buy from.
While most comments will be negative toward Dollar General, in many areas Dollar General or Family Dollar or Dollar Tree are the only places you can get access and distribution to a wide range of products and brands in areas which are otherwise underserved.
You can dislike it, but they've evolved and expanded in part because they are very good at serving these areas profitably, where other businesses aren't.
People wanting bank branches and grocery stores and brunch spots here clearly have never lived or worked in many of these areas. The reality of theft, low spend, and employees - though not universal - is hard to fathom if you're not trying to 'run' the business. Good will does not pay your suppliers or rent.
I have overall had good experiences with Dollar General, but mis-pricing items like this is completely unacceptable. This article is very damaging to their brand to me. Even though I haven't experienced it myself.
- in rural america, there are dollar stores everywhere that overcharge for small items. people treat them as a necessary evil and begrudgingly shop there.
- in nyc, there are corner bodegas everywhere that overcharge for small items. they are generally seen as beloved neighborhood institutions.
so... what's the difference? corporate owned vs family owned? length of time in community? presence of cute cat at the register?
This article is about something subtly different than overcharging: it's about consumers believing that they're paying one amount (the list/sticker price), and being charged a different amount (typically higher in the company's favor) at checkout.
In my experience, this doesn't really happen with bodegas: they might be overpriced in the "this is a bad deal for milk" sense, but they don't misrepresent their sticker prices to any degree that I've ever experienced.
(But also, I don't think bodegas do categorically overcharge in NYC. I think they're about the same as grocery stores, i.e. there's a large amount of internal variation in pricing because people generally don't want to make multiple bodega pit stops just to save $2.00 on eggs.)
Bodegas charge you a little bit more because a real human owner accepts the risk of serving a small community in exchange for being part of that community, and you pay that extra in order to make their existence possible.
Dollar Generals charge you a little bit more because a huge chain has driven out all the competition and you have no choice. The people who work there do not benefit from the extra you pay, and the owners are not members of the community.
There was no competition in many places dollar stores operate. They moved into those places specifically because they were underserved by larger retailers.
Because in NYC I pass by tens of the bodegas on the way to work and I can shop at any one of them. I can also shop at Aldi’s, Trader Joe’s, Costco, what have you.
You said it well yourself - “begrudgingly”. With so many options and price points, I don’t have to begrudgingly shop at bodegas. I do it happily if it serves my goal of getting a single can of Coke. If I want to get a whole stack of them, I’d happily get them at Costco. Options are great when you have them.
Probably „only store that’s in my vicinity“ in rural areas vs. „if that bodega sucks, I go to another“. So one is a necessity which overcharges, the other a convenience which overcharges.
Minimum wage in NY is $15.50, in Kansas it's $7.25. The overcharging in rural areas is not adjusted downward for lower wages. But I wouldn't shop at a bodega and don't find it virtuous there either.
Once upon a time I lived near the Prague city centre, and if the intent of such a corner shop is to rip off tourists and one-time visitors, the locals don't mind - at least as long as cheaper alternatives off the most notorious areas exist and are usable for them (Lidl etc.)
Quite to the contrary, the locals are sometimes happy to have such overcharged options at hand, for example if they are throwing a party and find out that they are short on vodka+cigs, and it is 1 am and all the regular shops are closed.
I believe Michigan has laws on the books that should be the model for this (the "Scanner law") - if you're overcharged at the register and the sale is completed, you have 30 days to get the price corrected plus ten times the amount of overcharge (between $1 and $5). Paying you the 'bonus' is optional, but if they don't do so you can file a suit for the greater of your actual damages or $250 (in small claims on your own or regular court which allows up to $300 in attorney fees).
An alternative would be to force stores with mischarge rates exceeding a specified level to close until they've completed a full audit of all shelf prices in the store but in some areas that could cause significant local hardship.
They are attributing malice/greed to what is more likely just incompetence compounded by inflation. The employees most likely haven't updated the pricing on the shelves. If you have ever been in a DG or DT, you can see that the inventory is generally a mess and just put everywhere. There is one or two people up at the front. They don't have as many people stocking shelves as a grocery store to keep the inventory in order.
in 2025 I'm surprised you can't just scan everything on your phone yourself and get the up-to-date price. are there laws stating things must be a posted price? seems easier for everyone to have something you can scan that show you the latest price, or auto updating tags.
I experienced this first hand maybe a year ago when I randomly walked into a dollar general to get something, their prices often times are pretty close to the "regular" versions of the product, but packaged specifically for dollar stores.
I get why people shop at them in rural places because that's the only shop within 10-20 miles but in cities it makes no sense. Had prices been 20-30% cheaper but in a smaller size it would still be a ripoff but an understandable one, but often times I saw products that were priced just 3-5% below their standard counterparts while giving you maybe 30%-50% of the product.
Same. My city has a Walmart, Publix, Food Lion, Kroger, and Aldi. Yet they keep building dollar stores, I think there's now 5 within 10 miles of my house. They all seem to do decent traffic, which baffles me. The stores are a mess, items disheveled everywhere, and rare to see more than a single person working. Really depressing places, I cannot figure out their appeal.
People still think they’re getting. Deal. They’ll figure it out eventually. Same with goodwill selling clothes for at or above new prices, eventually the knowledge propagates.
The main thing keeping the local dollar stores alive is the death of Party City as far as I can tell.
Every store has some stuff that is overpriced compared to peers and some stuff that is underpriced. Dollar stores make their money more on drastic understaffing (leading to the issue in the article) and national scale than they do on being a consistently worse value. They have the cheapest freeze dried strawberries by weight you can get anywhere other than making them yourself.
As someone who typically only enters a Whole Foods or a Home Depot for her retail experiences, the one time I entered a Dollar General, I was struck by how depressing it felt. I would never go back into one. Yes, I know how out of touch this sounds.
I think that's deliberate: you walk into a dollar store and think "they aren't spending a dime on the shopping experience, so they must be passing that dime onto me."
I have a very, very convenient Walmart including a pharmacy so I do go in from time to time especially for standardized purchases. But I don't really like it. And I poked my head into an adjacent Aldi once and retreated. Otherwise not really worth the headache.
I shop at Walmart and Costco. The customers at the Costco appear much better off, but they seem much more arrogant and inconsiderate. They leave carts in the middle of the aisle, talk on phones with their families blocking the way, and so forth. Same behavior in the parking lots. Maybe it's because Costco is always packed. The shoppers at the Walmart definitely look less well off. They are much more respectful and considerate of others. I like shopping at the Walmart more.
Publix in the southeast US will give you anything that rings up wrong for free. I shopped there for 20+ years and only remember getting a handful of things free.
”Dollar General argued that when customers create accounts – for example, by downloading the company’s mobile app – they agree to use arbitration to resolve disputes and forfeit the right to file class-action suits. The judge agreed.”
Their returns (margins are irrelevant) are usually lower than grocery stores. Large retailers will turn over their inventory tens of times a year, dollar stores won't so the returns are typically lower.
For some reason, left-wing journalists turn into law of one price zealots when confronted with this issue. The reality is that these locations have low-volume and stores everywhere are relatively expensive to run now. For some reason, journalists get angry at the company rather than people who control how much it costs stores to operate. I mean local governments in the US had no problem accepting Dollar General's sales tax from their poor constituents shrug probably more than the corporation is making from the store.
I live in the UK and there is a store like this, Co-Op. The Guardian finds it easier to blame evil foreign corporations because the Co-Op has much higher prices but is a non-profit so the narrative of the evil corporation crumbles.
Not charging the best-advertised price is dishonest. It might also be in customers' best interest if the cost of keeping consistent price data on low-margin items costs more than whatever the inconsistency is. Or the answer might be that dollar stores sell too wide of a variety too cheaply on too low-margin product to play supermarket-style pricing games effectively.
This comment section is full of allegations that dollar stores are predatory, yet when I look up their operating margins they are super low (4% for Dollar General, for example).
Yeah, queue the HN fake outrage about big companies and their C-Suite who are billionaires on the backs of the little people. So predictable.
Fact is, Dollar General and similar stores provide a real value to people who live in rural areas. Yes, their prices may be higher for some goods, but that is the price you pay for the convenience they provide. People are free to drive another 20mins to a WalMart or another store to save $0.50 for the same can of corn or loaf of bred. And, people who are really on a budget actually scrutinize the register receipts to make sure they are paying the price listed on the shelf. They can immediately bring up the discrepancy to the staff.
Wait, why? I get the emotional resonance of this, but unless their marketing spend is egregious I just don’t know how you can argue their whole business model is predatory.
It’s a bit like payday loans; they are a bad financial deal, but the alternative is no credit at all because the people who get them are high-risk borrowers and the costs associated with making and servicing a loan aren’t radically different for $500 or $50k.
Being poor is tough. But the low margins are a pretty good indicator that the alternative to shady businesses is simply not having businesses at all.
ROI on payday loans for lenders is typically very high and their main issue is usually regulation that limits the volume they can transact. ROI on dollar stores is very low because the margin is low, costs are high, and inventory turns is relatively low. For example, Dollar General's inventory turns are half Walmart, that means that to continue operating they need to charge higher prices (the margin).
Low margins aren't an indicator of anything. They are a component of financial return in addition to capital. One does not make sense without the other. In high frequency trading, they are making 1/100000th of a percent on a trade, that is a very high return business if you can do this millions of times a day. Similarly, if I run a housebuilder then I need a 20% margin because I am going to be turning over my inventory across multiple years. If you take out industries with intellectual IP and the secular shift in margin due to taxation changes, ROI across industries is relatively stable...because margins don't matter. What is a good indicator of customers exploitation is if ROI is high. For dollar stores, shareholders are getting exploited, not customers (look at DG/DLTR share price, this is with a secular upturn in multiples, if you take out unit growth which is inherently limited the financial performance is non-existent).
Do any of you actually shop at Family Dollar? I do. They're cheaper on a lot of stuff. A box of Cinnamon Toast Crunch is $2 less than the same box at the grocery store in town. I bought a pair of shoes there for $4. They weren't stylish, but lasted longer than the last pair of Nikes I purchased.
Yeah, sometimes the sale price posted on the shelf is no longer applicable. Either the employees don't feel like they are paid enough to be vigilant or maybe they're too overworked to keep up. Whatever the case, you just learn to keep an eye on the checkout, or alternately ask for a price check on it before the cashier starts ringing merch. The second approach is more polite and the cashiers appreciate that.
The same thing commonly happens at the grocery store, and other stores I shop at too. It's not unique to Family Dollar or Dollar General. But I will note, at the Family Dollar, the cashiers will often say "This is on sale now, but it's not posted yet. That whole shelf is discount." And they will give me a better price than what I was expecting to pay. They have to manually adjust the price to give that discount to me a lot of times. Grocery cashiers just scan as quickly as they can and don't check.
So while all the yuppies who never step into dollar stores are acting hyperoffended about this story, I think the story is unfairly targeting the dollar stores. Apparently saving money gives some people here the "ick" but the employees there are only human. A lot of times, lower paid humans. Cut 'em some slack.
This is poor behavior by the stores. The solution will be conversion to eink shelf labels that sync like registers do. Realistically, the fines will not be increased to the point where increasing store staffing and training is cheaper. I don’t know where Dollar General is in this process, but many other c-stores and grocery stores have implemented digital labels. Digital labels come with the temptation to experiment with more dynamic pricing which would also make it harder to shop on a budget. However, high staffing or fines also increases prices. I wish we had better retail in more of the United States, especially needier areas.
I am convinced the wallmarts in Canada are doing dynamic with the eink price tags. I was in the same location twice in a week to pick up snacks for a gathering and the price of chips were 50% more on the Friday vs earlier in the week.
I believe they may in the US, too. Anecdotally, I bought all of the Dr Thunder Zero Sugar at one store twice, and they bumped it about 20% for a few weeks after that. They didn’t change the other generic sodas’ prices.
They already (at least Target and Walmart) do the “cheaper online than in store”) - if you catch it they’ll price match themselves but who is checking all prices every time?
For people to vote with their wallet, there has to be an alternative. In "dead" markets where there is only one realistic alternative, whoever holds the monopoly can do whatever the fuck he wants, captive audience.
And no, it's not possible to compete as a startup against Walmart or any other of the corporate giants (and not just in retail, it's valid across industries) - alone because the sheer scale of Walmart allows them to extort insanely cheap pricing out of vendors. Walmart can sell for far cheaper than any mom and pop store can acquire.
Huh, with eInk prices, how do customers prove "Wait, the price on the shelf was different!", the store can just change the price as they go to double-check. As a customer you can take a picture of the price, but then it'll be an argument of "This picture is old/doctored/AI".
Of course the chances of this sort of scam happening are probably not that high, but hey, considering the country is rotting more and more, from the top...
Snap a pic I guess, there are many ways to game this either way, but if people start catching stores do this then it could lead to issues for the store.
>Huh, with eInk prices, how do customers prove "Wait, the price on the shelf was different!", the store can just change the price as they go to double-check.
Even with paper tags, the store can't get someone to change the price while you're waiting at the cashier for a "manager" to show up?
“In one court case in Ohio, Dollar General’s lawyers argued that “it is virtually impossible for a retailer to match shelf pricing and scanned pricing 100% of the time for all items. Perfection in this regard is neither plausible nor expected under the law.””
Sorry—-what? Isn’t that one of the fundamental basic jobs to be done and expectations of a retailer? You put physical things on display for sale, you mark prices on them, and you sell them. When the prices change, you send one of your employees to the appropriate shelves and you change the tag.
When on earth did we get into a world where that absolutely fundamental most basic task is now too burdensome to do with accuracy?
An easy test for this is how often the price at the register is higher vs lower than the marked price. If it's close to 50%, then ok, it's a mistake. But if it's higher...
I don't think you would reasonably expect it to be close to 50/50. Most price changes are increases and the mistake theory basically boils
down to the employees never updating the shelf tags. Which I think is an extremely plausible theory since the one employee at the store isn't paid enough to bother. And who's even going to check that they updated the tags? Dollar General isn't shelling out money for that.
There's another kind of store that's in a similar situation: thrift stores and nearly all
of them have also decided this problem is too hard. Lots of items are marked with just colors based roughly around their estimated value and the store changes the price/color mapping occasionally.
I used to work at Best Buy replacing pricing stickers before the store opened. We had a sheet of new stickers for changed prices every time and had to scan every sticker in the store to make sure they were all up to date.
It makes sense they’re all switching to e-ink tags though, probably saves a ton in labor and the occasional mistake.
That's because those stickers constitute an offer of sale for a given price. If a customer comes in, takes the item, throws down the cash to an employee and leaves, that's a 100% bone fide legal sale.
That's also why messing with price stickers is a crime.
It’s virtually impossible for them because they’re not considering hiring more people to do it.
Dollar General stores often run with one overworked staff member doing everything in the store, from stocking to working the register (which is why the register is unstaffed so much and you have roam the store to find someone to ring you up…)
The sticker price is legally binding - it constitutes an offer, and the cash register surreptitiously charging a higher price from what the customer has agreed to constitutes fraud. The problem is that asserting your rights takes time, resources, and energy that people shopping at these stores generally do not have. The people that would have the ability to push back instead just use their resources to move on and shop somewhere else that isn't immediately abusing them.
"The people that would have the ability to push back"...
And they can. Just bring it up to the cashier or managers attention, and voila, they adjust the price. Please let me know if you have had a different experience.
There's no "just". It takes resources to be scanning your receipt for discrepancies and/or running your own tally. And there are a few examples in the article referencing stores refusing to adjust prices, or of people noticing on their receipt that they were defrauded and the store refusing to reimburse them.
Resources to read the receipt? Are you saying poor people can't do math? Honestly, how much effort does it take to look at your receipt and look for errors? If you are really on a tight budget, I guarantee you will be looking over your receipt.
I have watched countless people shop with a calculator or pen/pad to make sure they stay on budget. It is not hard.
The hard part is talking to the cashier and waiting for a manager, potentially having to argue with both, and looking like a cheapskate.
If you've ever shopped at dollar stores they are often understaffed with a long line, no self-checkout, and a single cashier on duty if at all. If you argue about pricing you will hold everyone up in line, maybe get dirty looks and possibly wait an hour for someone with the authority to come and clear it up. Another person in this thread also mentioned that they got screamed at and chased out of the store for "causing a problem": https://news.ycombinator.com/item?id=46182451
I have been to the Dollar Store (and similar) many times and have never witnessed anyone getting yelled at for saying, "Hey, I think this was a mistake. Can you correct it, please?" (or any other place I shop - especially the grocery stores). We tend to have very positive experiences when pointing out pricing errors. My mother-in-law made it a point to review the receipts ever time we went to the grocery store. No big deal. As other have said, sometimes you get +10% of your money back and other times you get it for free.
Yes, mistakes happen; yes, people get over charged. But to imply people are shamed for asking to correct the error just seems...odd.
I mean, that person actually got yelled at and had to leave the store. Some are more sensitive than others and just the fear of an unpleasant interaction is enough for some people. I've let small discrepancies slide just because the staff looked overworked and I didn't want to make them stop what they're doing, run down to the aisle and check prices and get their supervisor. For most I think it's just a time thing. It isn't worth a couple dollars to commit to an unpredictable amount of time going back and forth and waiting for a manager. I salute those lions like your MIL who stand their ground and fight back but there are also many, maybe most, who are just in a hurry or want to avoid confrontation.
One note about asking for a refund/price adjustment. Occasionally the store workers forget to pull the sale prices off the shelf when the sale is over. In these situations, the manager/workers are appreciative since they can pull the sticker that was left on by accident. Just my experience...
That’s about ads, not sticker price on the shelf, and about a lack of obligation to sell at that price. It does not say that it’s alright to lie and charge a different price at the register.
> A display of goods for sale in a shop window or within a shop is an invitation to treat, as in the Boots case, a leading case concerning supermarkets. The shop owner is thus not obliged to sell the goods, even if signage such as "special offer" accompanies the display. […] If a shop mistakenly displays an item for sale at a very low price it is not obliged to sell it for that amount.
Boots was a UK court case. The Wikipedia article you linked has a note at the top that it mainly refers to British law.
In the US, local laws generally side with the consumer and legally entitle you to the displayed price. There are also federal laws from the FTC act against deceptive pricing.
>Michigan requires a bonus of 10 times the overcharge amount.
New Jersey’s Retail Pricing Laws mandate that most retail stores clearly mark the total selling price on most items offered for sale. Retailers must also verify the accuracy of their checkout scanners and may face fines of $50-$100 per violation for noncompliance.
Connecticut law requires stores to charge the lowest of the advertised, posted, or labeled price for an item. Customers who are overcharged are entitled to a refund of the overcharge or $20, whichever is greater
> When on earth did we get into a world where that absolutely fundamental most basic task is now too burdensome to do with accuracy?
It always has been this way since barcoded stock keeping units because of the problems identified by CAP Theorem [0]. Since the price data of an object must exist in two locations, shelf and checkout, the data is partitioned. It is also relatively expensive to update the shelf price since it depends on physical changes made by an unreliable human. Even if all stores used electronic price tags there will a very small lag, or a period in which prices are unavailable (or a period of unavailability like an overnight closure).
It would be interesting to understand at what point of shelf/checkout accuracy would lead to what increases in overall prices [1]. That is to say that pricing information has a cost: a buyer must bring the item to checkout to find out the true cost in the case of authoritative checkout, or the clerk must walk to each shelf in the case of authoritative shelf.
Once upon a time, each item in the store was labeled with a price tag and the clerk typed that tag into a tabulation device in order to calculate tax and total. The advent of the bar code lead to shelf label pricing since the clerk needn't read a price from each item, leading to the CAP Theory problem of today.
I suppose that the future will bring back something similar to individual price tags in the form of individual RFID pricing. This way each individual item on a shelf can be priced in a way that is readable by the buyer and the seller in the same manner.
One simple solution here (and for all sorts of legislated fines and thresholds) would be to tie them to inflation; it looks like the fine of $5,000 dates to the early 90s.
> North Carolina law caps penalties at $5,000 per inspection, offering retailers little incentive to fix the problem. “Sometimes it is cheaper to pay the fines,” said Chad Parker, who runs the agency’s weights-and-measures program.
I had a clerk flip out on me a while back at a Dollar Tree because I wanted a charge for a dollar -- it rang up as 1.25. They rolled their eyes and told me not everything is a dollar, and I maintained that absent pricing stickers indicating otherwise, the default is a dollar. When I pointed out another way to look at it is it's a twenty five percent price discrepancy, someone came out of an office and literally screamed at me and chased me out of the store for "causing a problem", telling me that if I'm going to cause problems, so will she.
I wasn't cursing or yelling, just calmly making the points I made above as the employees took a dive bar approach to customer service...
It doesn't surprise me at all that this kind of thing is intentional -- they're banking on you not walking out without the item having carried it to the checkout.
>They went up to $1.25 in '21 I think. It was extensively cover by the press.
I'd love to see a citation on that, since I think you're mistaken -- there's plenty of things that are still a dollar, mostly stuff like packages of napkins or plastic cups, cards and other sundries.
(What was extensively covered was that they were no longer a "everything is a dollar" store.)
I can't cite details, but I believe that case law has settled this many times.. When a customer enters a commercial business, there are implied contracts that are enforceable.. I am thinking of restaurants first. I believe it is the responsibility of the goods and services provider to show prices accurately and honor them, and variations of that are well-understood in court. These kind of transactions are common for thousands of years in the West.
We might also acknowledge that a pretty significant share of people do know that already and just shrug their shoulders to it, convinced that it's better to allow for that than do anything about it.
There's been a lot of work put into distilling "free market" into its most radical interpretation, and lots of people just aren't open to bringing much nuance or pragmatism to bear upon it any more. Many lessons learned painfully in late 19th and early 20th century have been forgotten and the counterweight and containment policies that they earned now tend to get ignored or dismantled.
And somehow instead of trying to make it better, there are never ending attempts to make it even worse somehow ( if some of the patents are to believed ). I honestly sometimes wonder if some of the stuff is not in place already only because public reaction if all those were plopped in place in one go.
Well, why don't the ethical non-predators open up shops in economically disadvantaged areas and offer non-predatory prices? The margins must be huge if they really are predators.
Good question, was on my mind too. The problem I could see is Walmart style - the predator will beat the prices of the non-predator down until the non-predator goes out of business, then raise their prices again.
They can do this because they are operating in other areas with predatory prices, giving them the ability to operate at a loss, and relying on the fact that at least some of those areas are not being challenged by non-predators.
Everybody seems to be playing the game right in this scenario. Interesting to try to come up with a good counter.
Does this actually happen? If a community opened up a co-op shop that started eating into the revenue of a dollar store, would the dollar store company try to fight back, or would they just exit that market?
Yes, I guess well capitalize companies could offer unrealistically low prices, but on the other hand, any kind of co-op or community driven organization has the benefit of not needing the margins. Dollar store investors are there to make a buck, if their capital isn't getting reasonable returns will ultimately exit the business and move somewhere else.
Cooperatives do not get rid of the net negative cycle. Ultimately whatever the benevolent entity ends up being, it becomes a contest of who can bear to lose more money.
Cooperatives distribute the losses but it is still a money pit.
Isn't it just the predators that care about stock price to enrich themselves? Couldn't a co-op exist which offered non-predatory pricing and didn't try to maximize their stock price constantly? And real estate in destitute rural areas is generally dirt cheap.
Of course this could be offered. But, no one wants to do it because it's a thankless job. And if you're going to do a thankless job, you'd probably rather get paid a lot of money to do it than very little
You're ducking the argument. The loot from predatory practices is quickly absorbed not just by the single player perpetuating them, but by their complements in the economic network -- complements which a competitor would have to deal with on the loot-enriched terms, which turn launders exploitation into a "necessity" and transforms any charity into a weakness that will ensure your replacement. That's what Nash Equilibrium is, and it's an elementary result of game theory that Nash Equilibrium can lie very far from the global optimum. Even the global minimum can be a Nash Equilibrium. We should aspire to do better.
It really wasn't this bad in the past on a whole. There were plenty of bad actors, but EVERY actor wasn't bad.
Just look at food recipes American corporations feed to Americans, and their different recipes for Europe that look more like the American recipes circa the 1990s. Everything in America is optimised to the max permissible bad action.
Yeah. Why do I have to pay a plumber to install gas appliances? It's just a protectionist racket.
Point is, it's easy to screech "predation" or whatever but the problem is that every one of these things has some justification that can be used in the abstract.
It does legitimately cost more to run a store like Dollar General than Walmart so the same can of beans has to cost more on their shelf for the same margin.
How much more, how much is justified? I don't know.
I know we're all idiots here because that's what easy tech money does to people but retail margins are razor thin. You can't just make thoughtless trite statements about what they "should" do because a few percent here and there is the difference between red and black and red means prices go up. I'm sure they're happy to not invest in accuracy when it makes them money but there's a pretty wide gulf between being sloppy because it suits you and actively making a business out of deceit.
If it says $4 on the shelf and you pay $4 at the register and walk out with the goods, that's a 100% legal sale and not theft. Not even if it was a mistake on the part of some employee (and it's not the employee's fault either, by the way)
The store is under no legal obligation to sell it to you, just like you're not obligated to buy it for that price. Depending on the situation, that might be false advertising they could get in trouble for, and obviously you're not committing a crime if you don't know the real price, but if someone says "oops, that's a mistake", and you take it anyway and give less money, that is theft in most states.
>If it says $4 on the shelf and you pay $4 at the register and walk out with the goods, that's a 100% legal sale and not theft.
Source? What happens if somebody stuck a $1 sticker on a ps5? Does that mean you can walk out paying $1 for it, even if the cashier corrects you? What if it's not something absurd but a plausible good deal, like $50 off?
I wish I could be surprised and I can see this happening in many places. This type of 'fraud' was predicted when we allowed the stores to stop marking items with the price.
Many places were I shop, hardly any products are lined up with the price attached to the shelves, plus the descriptions of some items are confusing due to the multiple names for the same thing.
Time to force stores to mark each item with the price once again.
Dollar stores are the new neighborhood "outlet stores" compared to outlet stores of yesteryear (remote locations for not much/any savings). They're actually glorified convenience stores while also not being proper substitutes for grocery stores in food deserts. Most US grocery stores are also now rip-offs like convenience stores were, while big box stores are somewhat savings stores now... f'kin' turbo inflation.
I don't know about the feasibility of government grocery stores, but I'm pretty sure the entire food supply chain would benefit from massively changing to the employee-/customer-/supplier-owned co-op model and get megacorps and private equity out of the normalized deviancy of predatory money extraction for essential goods and services.
"The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. ... A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. ... But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet."
"This was the Captain Samuel Vimes 'Boots' theory of socio-economic unfairness."
- Terry Pratchett, Men at Arms
——
Dollar stores, even when they're actually giving you low prices (and not just charging $1 for 1 of something that you could get a 3-pack of for $2 elsewhere), are often selling lower-quality versions of the products they sell—sometimes versions specifically made for them, but without any visible difference in packaging.
Yes, being poor is expensive and people just don't seem to grok that
Take energy. I'm not rich but I'm comfortable, my energy is paid for in an efficient way, I can shop around easily for the best rates for my lifestyle and so on. But if I had no money they'll fit a pay-per-use meter, they charge more money to fill that meter, if I can't fill it or forget to then the power goes out - and it's inconvenient to use it.
Years ago now I had a dispute with the water utility. I refused to pay, so, they eventually concluded that fixing their error was too difficult so they just created a new account starting from zero and wrote off all the costs for the disputed period entirely. If I'd been poor, they'd have threatened to cut off the supply (they're only threatening, fortunately it's not actually legal here to cease supplying clean water to poor people like they're not even animals) and sent scary people to demand payment.
> are often selling lower-quality versions of the products they sell
Clothes brands do this too.
Clothes at the outlet store aren't the same as clothes at Dillards, what's stocked at a struggling Macy's in a relatively poor area may be different from what's available for the same brand at Macy's in Manhattan, and all that may not be the same as what's in their flagship stores.
Sometimes they make it semi-obvious provided you learn their secret label language (Polo by Ralph Lauren, Chaps by Ralph Lauren, Ralph Lauren Purple Label, and about a half-dozen other major variants, for example). They do this so they can sell shit to unsophisticated consumers at a large mark-up for the name, riding on the reputation and clout of the good versions of what they sell (elsewhere, at even higher prices).
Cash strapped, but also presumably more likely than the general population to be innumerate or have dyscalculia or dyslexia.
It's the same bullshit that allows discount prices on Black Friday or during January sales to be completely misleading.
In the UK we are much tougher on this kind of manipulative pricing, but you still find manipulative things, like being unable to find the price-per-100g on discounted items and "clubcard" items, or bulk buys that end up having higher unit costs and yet seem not to be errors.
I don’t think this is true. Even if pricing in the shelves is accurate, in my experience Dollar General is typically a little more expensive than a normal mid-range supermarket (or e.g. Amazon) for most things.
1. You help your friend wash the dishes and notice their hefty, 5-quart stainless steel pot. You look it up on Amazon and it's like $50.
2. At $store, you see something that looks like that size and style of pot, but for only $10. What a steal! It's even ultralight so it should be easier to load in the dishwasher...
*Several months later*
3. Your pot is all warped to hell, making it difficult to cook evenly. But your friend's pot is probably fine for the next few decades if not longer. (Note: if this were an oven pan the warping would make it dangerous to use.)
4. To add insult to injury, $store got two more of your dollars just because.
I picked the 5-quart pot because I've seen one of these with my own eyes.
In any case, OP would have been better off paying me $38 for nothing but crushing their dream of buying a decent quality $10 frying pan.
then why do poor people shop there? is the idea dollar general is strategically misleading them to see prices advertised lower than a normal supermarket but in fact they are higher? i didn't think the article was making that strong of a claim at all. it seemed more like, operations are minimal and staffing short (which in theory enables lower prices) and they linked the staffing issue with simply just not being on top of updating price changes on the shelves
While the typical viewpoint is that "poor people" shop there, that's actually somewhat of a misnomer.
Most dollar stores in the US are located in rural locations, and in part because a lot of rural population is also "lower income" they get the appearance of "only the poor shop there". But the part the folks who label the stores as "for the poor" often overlook is the "ruralness" aspect. That dollar store might only be a five to ten minute drive away to grab something, meanwhile the Walmart or Target or other, that likely has the better deal (the 128oz of Tide for 9.99 vs the 8oz of Tide for $1.50) is a forty-five minute drive away one way. So couple 1.5 hours round trip commute, plus fuel costs for that 1.5 hours, and you start to see why folks would more likely shop at the dollar store vs. the store that actually gives them the better deal overall.
That's partly the "magic" of the dollar stores for corporate. They sprout up like weeds in rural areas much like Starbucks sprout up on every corner in cities. And they capture sales largely because by sprouting up like weeds, they are a shorter round-trip drive to grab sometime (esp. to grab those one or two things you forgot last weekend when you /did/ make the 1.5 hour round trip drive to go to the nearest Walmart for the better deals). These store's sales largely come from the 7-11/Starbucks method in the city: convenience.
And couple the above with the fact that in rural USA, there is effectively zero public transportation and very little in the form of uber/cab companies, and so if one does not have a car, one may be stuck shopping at the dollar store 5-10 minutes away even if one knows the stores are gouging.
1) Misleading advertising? Yes. Obviously this is true if you accept both that their prices are generally higher, and that they’re advertising low prices.
2) They’re in more convenient locations - often on the drive home already - and are smaller so are faster to get in and out of when you’re hurrying to or from work.
3) If you’re _not_ working, they’re probably cheaper to _get to_, especially if you can’t drive, because they’re closer.
I’m not as up in arms about this as some - in some respects this is just a new iteration of the corner store or bodega, which have always been a little more expensive than supermarkets (and often a little disorganized…) - but it is the truth.
Dollar General and Family Dollar are smaller stores that are generally the only option within a reasonable travel distance. Here in the South, you might be able to catch a bus to Wal-Mart, but it’ll take 2-3X more time (1 hour instead of 20 minutes), so people go with the closer option even thought it is more expensive. No guarantees that Wal-Mart will be cheaper either.
Listen, I know we all love to circle jerk about how dollar stores are evil, but you can walk into just about any regional chain supermarket and replicate the same exercise and get about the same results.
Sorry, real people who are on a real (strict) budget pay attention to the price of goods when they shop. If you are really hurting from a $3 overcharge, chances are you pay very close attention to the register receipt and bring it to the store's attention. Regardless of income, my wife and I routinely scrutinize the register receipt. Force of habit.
Can you? I think the implicit counterclaim in TFA is that other supermarkets/stores don't fail state pricing inspections nearly as often. If you have evidence/articles showing that TFA has cherry-picked dollar stores for criticism, that would be helpful to share.
I've got one local grocery store where the meat prices are sometimes off and another where it's the bakery. The fact that it seems to be confined to certain departments makes think it has a lot to do with the quantity and quality of labor being applied. And dollar stores being dollar stores they apply the cheapest and they apply it sparingly. Not that that excuses it but it at least explains it.
> listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50
I'm sure the US obsession with not putting the actual price (tax included) on the shelf helps a lot with this. I would notice quite quickly if a store would systematically overcharge me in Europe. It'd be much harder in the US where I expect the price on the shelf to not match the price at checkout.
Yes, but the US consumers are conditioned to see one price and pay a higher price. You and I might see +40% and think "that's too high a percentage". Others see +something and think "just like every other time". If they even look - I'm sure these items are often in a cart with many other items.
The stores get away with it because even when ignoring the fact that tax is added after, few of the shoppers in these stores will remember the shelf price for a basket of 20+ items from the store. They might remember one or two, but they won't remember (and therefore will not notice) enough of the shelf prices to notice the systematic overcharge at the register. In reality, a good number of the shoppers likely don't remember any of the prices from the shelf tags, and will not be mentally summing up what the final price should be, so those shoppers won't notice the discrepancy at all.
> stores get away with it because even when ignoring the fact that tax is added after, few of the shoppers in these stores will remember the shelf price for a basket of 20+ items from the store
We don't bother remembering it because we're in a high-enough trust society where that burden shouldn't be necessary.
> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50.
This very rarely happens in MA, because when it does the store has to give you the item for $10 off, including if that makes it free. And they have to post a sign at the register explaining the law, which means when you're invoking it all you need to do is point at the sign.
https://www.mass.gov/info-details/consumer-pricing-accuracy-...
Note that this law is only for certain products. We would have people at the liquor store I used to own point out mislabeling occasionally and claim we owed them the $10 difference from this law. While we tried to work with customers when we made a pricing error, not only does the accuracy law not apply to alcoholic beverages, but it would often be illegal for us to offer the customer the mistaken price. Alcohol retailers in MA are not legally allowed to sell their products for less than they purchased them.
Michigan in the 90s had a similar rule. Customer gets 10x the overcharge (up to $5 max). I can guarantee you they fixed the price immediately.
Where I live there’s no such rule I can tell you no one is correcting the price when I point out that I got overcharged (they usually shrug with “it does that sometimes”).
It's different in different states. In Maryland, once a complaint is filed with the relevant authority, the store has a certain number of days to correct pricing. Most retailers will give you the misprice if it's clearly their fault in not changing the tags, as a matter of policy.
The confusion around this law is quite frustrating, though. Quite a few customers think they're entitled to not just prices on tags that haven't been updated, but prices for what are clearly entirely different products.
Dollar stores are private equity with a checkout lane.
In 2025, Dollar Tree sold Family Dollar to a group of private-equity firms: Brigade Capital Management, Macellum Capital Management and Arkhouse Management Co.
https://corporate.dollartree.com/news-media/press-releases/d...
It’s a business model cosplaying as poverty relief while quietly siphoning money from the people least able to lose it. They already run on a thin-staff, high-volume model. That 23% increase is not a glitch. They know their customers can’t drive across town to complain. They know the regulators won’t scale fines to revenue.
Has private equity ever done anything good for anyone outside of the investors?
> Has private equity ever done anything good for anyone outside of the investors?
If it's not publicly traded, it's super secure from any public accountability.
And while I'm increasingly hostile toward the shareholder model, we do get one transparency breadcrumb from this (gov managed) contrivance: The Earnings Call
Earnings Calls give us worthwhile amounts of internal information that we'd never get otherwise - info that often conflicts with public statements and reports to govs.
Like CapEx expenditures/forecast and the actual reasons that certain segments over/underperform. It's a solid way to catch corporations issuing bald-faced lies (for any press, public, gov that are paying attention).
I'll bet 1 share that there are moves to get this admin to do away with the requirement.>If it's not publicly traded, it's super secure from any public accountability.
Under the existing legal and regulatory model, yes.
But what abusing that model long-term will eventually result in government-level change that effectively bans the existence of such exploits, wide-spread vigilantism, and/or some sort of collapse.
> what abusing that model long-term will eventually result in government-level change that effectively bans the existence of such exploits, wide-spread vigilantism, and/or some sort of collapse
The endpoint of vigilantism and collapse is more economic opacity. Not less.
My personal view is companies with more than any of 1,000 employees, $10mm revenue or a $100mm valuation should have to file a simple annual disclosure showing the cap table ad balance sheet, a simple P/L, list of >5% beneficial owners and their auditor. But the path to that is through legislation in a complex, stable society.
I'm not sure why private equity is singled out here, when every time a public company does a bad (eg. Boeing), people crow about how public companies only care about juicing next quarter's earnings.
The big difference is the extent to which PE will go to juice the quarters earnings. Public companies cannot and will not just fire all staff, fleece customers to the point they won’t return and take on debt that they have no intention of paying back. PE will do all of the above and more if it means they get their money. Which means, you as a customer get screwed over more when PE is involved.
>Public companies cannot and will not just fire all staff, fleece customers to the point they won’t return and take on debt that they have no intention of paying back.
Why? Is there some code of conduct for public companies but not private ones?
> Is there some code of conduct for public companies but not private ones?
No but there’s a difference between private companies and PE owned companies. PE model is very different from regular private companies, and it often involves extracting maximum profits at the expense of the company itself.
And as far as public companies go, shareholders will have to say something about the operation of the company if you start intentionally sinking it.
Because a PE fund is at most a seven year timeline, and everybody knows it. There is absolutely no incentive to add value beyond the next sale, and often you only need to add the perception of value. To quote my CTO of a PE owned company: "we want to make it look like we're on the road to <big investment in strategic roadmap>", not actually accomplish it
> Because a PE fund is at most a seven year timeline
Berkshire Hathaway is a PE fund with permanent capital.
Broadly speaking, making generalisatios about PE is almost impossible because it's an asset class which is, essentially, all non-public business. Instead, it's more useful to think about which element private equity touches you're specifically complaining about: capitalism in general, financial transparency, leverage and liability.
The problem with PE is only the hyper aggressive and generally terrible ones make the news.
The quiet ones that simply run business well, don't make the news.
There are PE firms that specialize in rescuing distressed companies with potential and turning them around. In many cases not firing anyone and holding onto the form they acquired for a long time.
> quiet ones that simply run business well, don't make the news
And don’t call themselves PE. They’re a diversified family business. Or a VC fund. Or whatever the fuck the Ellison’s are doing to Paramount.
> Is there some code of conduct for public companies but not private ones?
There's a pattern of behavior, to be sure. The primary control on public companies is shareholder scrutiny. Gutting your company for short term gains, is not always popular. The more diverse the shareholder cohort, the less popular it tends to be.
Private companies don't mind it when they can literally start a new company with the assets from the old without the pesky plebian investors.
Ofc you know this.
Galaxy brain: both are bad, although at least a public company is, ostensibly, trying to make a good or provide a service (lol).
>although at least a public company is, ostensibly, trying to make a good or provide a service (lol).
/s?
No? Companies aren't about making things anymore, they're about stock buybacks and making as much money as possible while doing as little as possible (or selling our data). That's why the refrigerators have ads and break after two years. At least private equity is more honest about being vulchers, whereas Kohler is going to look you dead in the eyes and try to convince you you need a toilet with a camera in it. What a joke.
>At least private equity is more honest about being vulchers,
Again, what's the basis of this? Half the people in this thread seem to take it for granted that PE is somehow "worse" than public companies, but can't seem to articulate why. The only legal difference between public companies and "private equity" is that the former has stricter reporting requirements and can be bought by non-accredited investors. There's nothing about "ostensibly, trying to make a good or provide a service" or whatever.
PE does this wealth extraction trick which breeds the ill-will.
Eg: purchase a few mom&pop veterinarian business in some area. Squeeze the service rates, trim hours, reduce staff, add some debt. The PE investor gets cash out - the business is destroyed and the community loses a (critical? valuable?) service.
It's a common pattern. But not all PE is like this. Like "not all men" and "not all guns" - but enough that the pattern is easily associated - and disliked by many w/o the power to keep them out.
Private equity is far worse. It means 100% ownership by a group of sociopaths who are executing on a plan to extract as much cash as possible quickly with no other goals at all.
At least public companies have some diversity in ownership and agenda.
>Private equity is far worse. It’s mean 100% ownership by a group of sociopaths who are executing on a plan to extract as much cash as possible quickly with no other goals at all.
...as opposed to the average public company? An average company might have more "average joe" shareholders (almost by definition, because private equity is typically off limits to non-accredited investors), but outside of meme stocks, there's not enough of them to make a difference. The rest of the shareholders (eg. pension funds, insurance companies, endowments, family offices) can be assumed to behave like ruthless capitalists chasing the highest returns, regardless of whether the company is public or not.
I see these private equity takes on HN frequently and am really baffled by the ignorance. There's a very clear difference between a public and private company - the fiduciary duty to shareholders.
There is a legal requirement for directors of public companies to act in the financial interests of all shareholders. In practice, and according to precedent, this means long term viability of the company, in other words, a sustained profitable business.
There is no such requirement for a private company. In practice (esp. recent history), this means private equity firms acquire successful businesses to "mine them" of their wealth - capitalizing their assets for personal gain, and leaving nothing left.
The question for public companies isn't how many retail vs institutional investors they have, it's whether an investor can make a claim about a breach of fiduciary duty. It's patently false to say that the institutional investors (who yes, do have more sway) aren't interested in the company acting in their financial interests.
>There is a legal requirement for directors of public companies to act in the financial interests of all shareholders. In practice, and according to precedent, this means long term viability of the company, in other words, a sustained profitable business.
All that means is that controlling shareholders can't use the company as a piggy bank and raid it to fund their other ventures. It doesn't mean the business has to be "sustainable" or whatever. In fact, it's perfectly legal for the board to sell to a "vulture" PE firm that will sell the business off for parts, as long as the sale price is good enough.
> There is a legal requirement for directors of public companies to act in the financial interests of all shareholders
No, there isn't.
The whole point of Revlon duties is that they trigger "in certain limited circumstances indicating that the 'sale' or 'break-up' of the company is inevitable" [1]. Outside those conditions, "the singular responsibility of the board" is not "to maximize immediate stockholder value by securing the highest price available."
> There is no such requirement for a private company
Are you thinking of minority rights? These vary based on whether a company is closely held or not [2], not whether it's public or private.
[1] https://en.wikipedia.org/wiki/Revlon%2C_Inc._v._MacAndrews_%....
[2] https://millerlawpc.com/rights-minority-shareholders-private...
Why bring up Revlon duties when as you say, their relevance is only during company acquisition or restructuring?
It's well established over hundreds of years of case law that directors of public companies have to act in good faith to benefit the company (and therefore, the shareholders).
Weird cherry pick.
> Why bring up Revlon duties when as you say, their relevance is only during company acquisition or restructuring?
It’s an exception that proves the rule. In that specific case, what you’re saying applies. In all others, it does not.
> It's well established over hundreds of years of case law
Where are you getting this from?
> directors of public companies have to act in good faith to benefit the company (and therefore, the shareholders)
Where did you get that this only applies to public companies? What you’re describing is basic English and Delaware corporate law.
Also, there is a massive difference between “all shareholders” and “the shareholders”. And nothing about public companies says they can’t be structured in a way that sometimes undermines some shareholders. This comes up most commonly when different shares have different voting or blocking rights. But it’s also fundamental to the intent behind B Corps, publicly traded or not.
> I see these private equity takes on HN frequently and am really baffled by the ignorance.
Probably a good time to note that you’re posting this comment on a website created by a private equity firm for promotional purposes.
Zing! Gotem! Reddit moment xD
Let me explain this with a simple example:
* If a company controlled by PE goes bankrupt, shareholders (PE) likely make a profit * But if a publicly listed company goes bankrupt, shareholders lose their money
In other words, PEs almost never lose money, so they could extract the last bit of a company, even more short sighted than shareholders of a public company
> If a company controlled by PE goes bankrupt, shareholders (PE) likely make a profit. But if a publicly listed company goes bankrupt, shareholders lose their money
This isn't remotely true. Plenty of private equity investments go bust before they can pay themselves back. And plenty of public company investors milked a company for interest payments or dividends into the ground.
> PEs almost never lose money
Private equity funds regularly lose money. Usually to lenders.
You're complaining about leverage in general. Probably not private equity per se.
>* If a company controlled by PE goes bankrupt, shareholders (PE) likely make a profit
That's not necessarily a bad thing, or sign of anything sinister. If a business is failing, and you buy it for pennies on the dollar, and despite your best efforts it still goes under, so you liquidate it, you can still turn a profit if the price you paid is lower than what you got from liquidating it. That's not bad, because private equity (or anyone else, for that matter) isn't expected to operate as a charity. The only reason they're willing to stump up the cash to buy the business in the first place is the expectation that they'll make money. It's also not bad for the original owners either, because the fact that they hold to PE rather than someone else, or liquidating it, suggests that the PE offered a better deal than either.
>But if a publicly listed company goes bankrupt, shareholders lose their money
Often times yes, but sometimes not, eg. hertz.
> despite your best efforts
Citation needed.
If you’ve ever spoken to employees of a public company that was sold to private equity, you’ll know how much of a difference there is. It is a significant difference.
> The rest of the shareholders (eg. pension funds, insurance companies, endowments, family offices) can be assumed to behave like ruthless capitalists chasing the highest returns, regardless of whether the company is public or not.
Right but they are seeking the highest returns as equity holders typically, usually through things like stock buybacks.
Private equity firms have much more devious ways of looting the companies, like management fees, acquiring other portfolio companies, and various other tricks.
If you’ve ever seen the Goodfellas scene where they bust out the nightclub, that’s quite literally their business model.
>Private equity firms have much more devious ways of looting the companies, like management fees, acquiring other portfolio companies, and various other tricks.
"looting the companies" is non-nonsensical when they also own it. It's like saying a scrap yard is "looting" the cars it bought by taking out the valuable parts to resell or whatever. The rest of the stuff might make sense in the context of the LPs getting screwed over, but not in the context of portfolio companies that they own.
PE puts very little of their own money into the deal though, while they own it they don't buy it. They use incredibly high leverage and often saddle the company with monstrous debt, then loot the assets to pay the interest and take management fees while doing all this. Red lobster is a great recent example. They sold off all the real estate, then had stores lease it back, turning profitable locations into losers. They often do the same thing with manufacturing, goodwill, brandnames and sales channels.
Think of this like an oil well. If you pump off all the gas, you depressurize the reservoir and can never get the oil. You need to slow your production to get the oil first, but private equity is happy to skim the cream and leave the milk to spoil.
What you’re saying just isn’t true.
Looting the companies is accomplished by stacking up debt and then giving themselves the money. Occasionally there are a few variations like looting a pension fund or taking a high quality product and making it horrible and selling that until people notice.
It’s literally their business model, it’s happened thousands of times and is a very clear fixture of the modern American business climate.
If you don’t know this it’s because you aren’t looking or it’s in your interest to say you don’t know this.
Private equity are the crows of the economy. They pick off weak / dysfunctional businesses and open space for fresh competition (or for other markets to open up).
As far as I’ve seen that’s as far from the truth as it can be. They in fact consolidate terrible businesses, undercut the good ones and drive them out of the market until only they are left, after which point, they get even worse.
From what I've seen, they take a terrible business and liquify its valuable assets for their investors, freeing up capital to be invested more productively elsewhere in the economy. Of course those investors could take the money and commission a bunch of statues of themselves, but frequently they do something more productive than that.
A lot of the negative reaction to them seems to me to be mostly emotional. They'll dismantle a business that holds a lot of nostalgic value for people, even though it's long since ceased to be a viable and productive company. But it wasn't their fault that the business was in that situation in the first place! Years of mismanagement and neglect or perhaps disruption from a competitor left the business in zombie-like state. PE came along and put it out of its misery rather than allow it to slowly crumble while depreciating the value of its illiquid assets.
> lot of the negative reaction to them seems to me to be mostly emotional
Mine specifically stems from PE buying up all but one 24x7 emergency vets in a 20 miles radius from me. All of them were thriving businesses. There is only one remaining non PE ones has its days numbered. After monopolizing the emergency vet market, they shut down a few locations, which previously acted as competition for each other, effectively cementing monopolies in those individual neighborhoods as well. Now, you pay $200 to just get your pet checked out and always have to wait anywhere between 6-8 hours in triage if your pet isn’t literally dying, because they are perpetually understaffed and there are no other options. They also recommend unnecessary tests and treatments, present them as “optional” but refuse to treat your pet if you don’t agree to their “optional” treatment plan.
Lots of businesses have big positive externalities [1]. They provide more benefit to their communities than they take in for themselves. Unfortunately, these sorts of businesses are easy pickings for PE.
Artists are a classic example. They generate huge positive externalities for a community while reaping almost none of the benefits for themselves. Artists get severely exploited by the economy for this!
To counteract this problem we need other ways of addressing the positive externalities. In the case of artists, this usually comes in the form of public (and private) patronage and endowments for the arts.
[1] https://en.wikipedia.org/wiki/Externality#Positive
What you are describing the best-case scenario. They happen.
What also happens is, they take operating businesses with reasonable returns, buy up all it's supply chain or it's competitors to reduce costs or enable monopoly pricing, then load the company up with debt, squeezing it into a terrible company. That is the bad scenario which people object to.
An example: https://pluralistic.net/2024/02/28/5000-bats/#charnel-house
They could do this, but there's not enough targets of this type for the money invested in the sector. They've also proven to not have the advertised & applicable expertise to run companies any more efficiently than current management. Nostalgia had nothing to do with it unless that's one of the company's assets. I've been inside on three PE acquisitions, and 5 sales by PE to new funds. The playbook was the same for them all: predictable, decent cash flow, cut expenses, grow enterprise sales, sell on before long term cracks from lack of strategic investment showed. If anything they accelerated the decline of healthy going concerns, but at each sale the insiders did great.
If only it actually played out that way[0][1][2][3]
Whatever legal and theoretical role they play in the economy does not match the actual, real role they are playing: PE firms are by and large, economic vampires. They have a well documented history of sucking the life out of a sector at the expense of workers and consumers alike
[0]: https://www.wired.com/story/megan-greenwell-bad-company-priv...
[1]: https://www.theguardian.com/business/2024/oct/10/slash-and-b...
[2]: https://www.theatlantic.com/ideas/archive/2023/10/private-eq...
[3]: https://doctorow.medium.com/the-long-bloody-lineage-of-priva...
That's not true at all! Funds often look for mature companies with predictable cash flow. They can make returns while also squeezing margins under the illusion of expertise and economies of scale and seek to the next fund for a multiple. They're an alternative to the massive headache of going public and getting a liquidity event, not typically the model for your weak and dysfunctional company.
Tell that to former JoAnn Fabrics customers.
They should have paid more for the fabric, I guess. Private equity tends to loot things on the way down. Joann was on the way out regardless.
Lol, the "it's actually good for customers" response is "they should have paid more"? I love it.
Nobody in this comment chain was saying it was good for the customers. The GP was saying that they clear out room for new businesses, and if brick-and-mortar-fabric-superstore were still a viable model someone would be doing it.
I am looking for fabric right now and am terribly frustrated not to have anywhere but limited quilting shops available. Online is not an answer, because you can't handle the fabric for weight, exact color, and stretchiness.
JoAnn drove all the medium-sized fabric stores out and left us with nothing.
The lack of customer density over time drove out all the fabric stores - medium sized or not.
At-home sewing has been declining since I've been alive, and it was just barely hanging on when I was a kid. The demographics simply cannot support these stores in most locations outside of hyper-dense cities.
Not to mention the folks who shop for fabric tend to be some of the most cost-conscious consumers around. They are more or less the prototype of a customer who will go to a B&M store and then price match on-line,.
I'm honestly surprised even Jo-anne survived as long as it did.
How the hell does consolidation, monopolization, externalizing costs and extreme leverage "clear the room for new businesses"?
Even on HN playing the role of PE apologist is not going to fly ...
They pick on the weak companies but the basic model is to pick over the corpse and leave someone else holding the bag. Make it look good on the surface, leverage it to the hilt, extract cash and let it die.
I think the avian analogy you are looking for are vultures picking at the remains of road kill.
How do I travel to the alternate universe where private equity apparently makes things better instead of worse?
You stay in this one. If PE wasn't producing value it would disappear. What, you think people dump money into PE because they want to twirl their villainous moustaches?
Most people would say that extracting wealth and concentrating it into an ever shrinking group of elites is making the world worse. They do this both from the companies you and I might work for, but more importantly from the markets that have no defenses.
this would be somewhat arguable as okay except for their introduction into categories like daycare, emergency rooms, drug and alcohol rehab, care homes for the geriatric and disabled, etc. things that probably shouldn’t be profit oriented to begin with yet are and are being snatched up by private equity, worsening outcomes in basically all of them
"shouldn't be profit oriented" is another way to say "costs will quickly grow exponentially", because there's absolutely no incentive not to let them.
Is anyone better off if elderly care becomes too expensive to offer at scale?
1: "Shouldn't be profit oriented"
2: ???
3: "too expensive to offer at scale"
Except that Americans pay far more for these services than places where they aren't profit oriented. Try again. Reality does not support your assertion.
> Has private equity ever done anything good for anyone outside of the investors?
Yes. Productivity typically goes up [1]. Its reputation for job cutting is overblown [2], as is its record on price increases [3]. And historically, it's tended to decrease concentration in the industries it operates in. (The conglomerate break-ups of the 1980s were fuelled by new entrants and carve-outs.)
Instead, what I think we have is a category error. Berkshire Hathaway is a private equity shop as is all venture capital [4], and most family businesses of any scale are structured identically to sponsor-owned firms. Meanwhile, LBOs have been unable to shake the private-equity label for decades, unless they're lead by a founder, in which case they're "take private" transactions. In essence, we brand failed alternative asset strategies as private equity ex post facto.
Moreover, transaction size is negatively correlated with returns, particularly for leveraged buyouts. So the biggest private equity deals, which represent a minority of transaction activity, are disproportionately (a) bad and (b) public.
Finally, we get a lot of false conflation of market failures to private equity per se. Private-equity owned hospitals are bad [5]. But I haven't seen great evidence they're worse than other privately-owned hospitals with similar scale. The problem is hospitals probably shouldn't be run for profit or on-locally. But because nobody in particular is defending private equity, that's easier to attack.
[1] https://www.hbs.edu/faculty/Pages/item.aspx?num=67233
[2] https://www.jstor.org/stable/43495362
[3] https://centers.tuck.dartmouth.edu/uploads/cpee/files/Is_Pri...
[4] https://en.wikipedia.org/wiki/Early_history_of_private_equit...
[5] https://jamanetwork.com/journals/jama/fullarticle/2813379#go...
The question anyone reading this analysis should ask is: if private equity is so benign, where do the returns come from?
The unlock, which these papers don't understand, is the extractive nature of P/E that is hidden.
A few clues: 1. A .5%-1% increase in prices is meaningful (Overall industry prices rise after buyouts, but again the price increase is on average very modest.) Retails margins routinely are measured in fractions of percentage points (bps). As an example, even if overall hospital prices stayed similar, P/E firms have been caught jacking up prices on people who need it most. Research on "Surprise Billing" in emergency rooms spiked immediately after PE firms took over staffing groups. Are you surprised?
2. Equity multiples are "effectively" a form of stealing from retail / pension plans: this is where the real 'theft' happens (if you want to call it that). If you reraterevenue from 6x (private) to 15-20x, someone is now paying 2-3x more per dollar to have that company in society. The key is the P/E OWNERS reap that value, so even if there are no job cuts, the wealth being created aggregates 'money supply' to the owners. This has downstream impacts on inflation.
3. Independent of aggregate effects - local effects are quite devastating. This is not P/E's fault, but closing down plants can kill towns for good. The question here is ownership - a family feels some tie to the community to attempt to help their friends and neighbors. P/E absolutely destroys this tie - the subtle but measurable effects compound.
Finally, even if you like P/E as a VEHICLE (which - I would argue it hasn't been a 'good' ones since like the late 90s), you can't ignore the fact that it's returns have largely been eaten by fees.
You're right to say that P/E is just playing the market. That doesn't mean that its impact on society has been good - the entire reason we're in the current political and economic situation we are today are by following the 'laws of the market' which have hollowed out the middle class and created a pretty large affordability crisis despite the world having achieved record levels of wealth.
The transfer from 'doers' to 'owners' has been a net negative for American society, and one of the primary reasons we don't 'build' things anymore - it's just not capitally "efficient"
> if private equity is so benign, where do the returns come from?
“During the last 10 years PE on average did not outperform the public markets in aggregate” [1]. (Individual firms overperform, some of them consistently.)
> even if you like P/E as a VEHICLE (which - I would argue it hasn't been a 'good' ones since like the late 90s), you can't ignore the fact that it's returns have largely been eaten by fees
Yup! Though nitpick: we often stop calling it PE when it works. VC is PE. So are Berkshire Hathaway and founder-led “take private” transactions.
> transfer from 'doers' to 'owners' has been a net negative for American society
PE is often an exit vehicle for small builders. Particularly in the space that deals with SBA loans.
[1] https://www.hbs.edu/ris/Publication%20Files/24-066_cc5a53f4-...
If you're a Dell customer, Michael Dell taking the company private again seems to have done wonders for them.
In general I have a pretty negative view of private equity. However I did see this awhile back that seems at least partially positive: https://www.cnbc.com/2023/07/27/private-equity-giant-kkrs-an...
Not yet. Sometimes employees if they get second bite of the big apple. PE do well in capital-intensive sectors. I'm not sure if their playbook fits the real needs of dollar stores. Instead of focusing on things like debt and aggressive cost cuts, most customers just want fair prices, stocked shelves, clean stores, friendly cashiers and basic respect—things that PE firms often ignore. In DFW, I was surprised to see 1-2 person dollar stores!
So I work in commercial real estate, obviously a large private equity influenced industry. I've worked in REPE and in other capacities.
There's degrees of PE. Some good, fine, and some worse.
Take real estate development. It's probably one of the suckiest businesses to be in. I know 3 developers who have committed suicide because when things go wrong, your entire life collapses (you put up all your assets in order to obtain construction loans). The litigation, brain damage, and risks are enormous. Increasingly, the payoff is awful (due to worsening legislation and NIMBYism and worse market condiditions)
However, private equity in development I think is a good thing. When there are investors willing to put this money at risk, we get much needed construction of housing (see Austin, TX where rents are falling off a cliff due to over building).
Now look at Los Angeles, which new permits are literally almost non-existent because LA is one of the most hostile places for developers. You can't make money in LA, so there's no capital available.
Then you end up with "affordable" housing developers adding the only supply at $600-900k/unit costs vs the market rate developer at $300-600k/unit.
----
On the other hand, "value add" private equity is much more suspicious. It's more cut throat, easier to end up in crony capitalist situations by operating with a "cut expenses, provide less, make big bucks" model. The people in this world are the kind of guys who have never done anything hard with their hands other than gotten a sore thumb from pounding too hard on their keyboards to adjust their excel model ("Mr. The Model is Always Right") too hard all night long.
This is how we end up with old properties who get flipped 4x each being sold with "upside the seller was too stupid to take advantage of" and ending up in situations where tenants get priced out due to private equity seeking infinite growing returns. Oh and by the way, every previous owner did "lipstick on the pig" jobs because why not try to save costs and make your levered IRR 16% instead of 12%? You cannot show that kind of return when you promised 18%... then it'll make it harder to fundraise your next deal!
This isn't to say that "value add" is a dirty business. We certainly need to balance the incentive to modernize and renovate properties. An d developers overbuilding isn't always a good thing.
So its nuanced. I think people need to fairly give credit that there are both good and bad. The capital efficiency is real and produces real world outcomes since there is a strong financial incentive at the end of the door.
But financial incentives sometimes bump up to issues causing harm in real life, which need to be recognized and called out.
Why is private equity different from any other form of organization? Publicly traded companies are even more addicted to getting revenue. Non-profits like universities may not have shareholders, but somehow the price of tuition keeps skyrocketing even faster than the prices at the dollar stores. And it's not like the religious charities have been pure.
To me, that is an utterly hilarious question to be posing on this website of all places.
That's a good point. Private Equity is a fairly broad umbrella term that encompasses a variety of investment strategies and business models.
The type of Private Equity that most here are referring to is the type that buys up existing businesses, squeezes as much money as possible out of them, and throws their desecrated corpses in the gutter. These "investors" are a blight on society, this activity should be criminalized, they should be in prison.
But there are a lot of well-meaning investors who do great things for society that also get stuck with the same label.
Just like crows! People hate crows even though they play a valuable role in ecosystems.
I would argue that moribund businesses who maintain a competitive moat but are otherwise extremely unproductive and inefficient are the real blight on society. If PE firms can liquidate those businesses and open up the market while freeing up capital for more productive investment then I fully support them.
I would love to hear some counterexamples though. Productive and innovative businesses with really solid fundamentals (balance sheets) that were acquired and dismantled by PE.
Red Lobster?
Weren't they losing money for years on all-you-can-eat seafood specials [1]?
It's not uncommon in the fast food business to be breaking even or losing money on all aspects of the business while the true value of the company, its real estate portfolio, steadily grows. The fact that investors decided they wanted to cash out should be a surprise to no one.
[1] https://www.fastcompany.com/91129776/what-really-killed-red-...
And this is exactly why I only shop at Costco. While other retailers try to get me to buy more stuffs, Costco try to make sure I'm satisfied enough that I'll renew my yearly membership (their main profit source). The incentive structure aligns very well.
Buying in bulk is about having the ability to both afford next week’s food this week and have the means to store it. Not to mention the annual subscription.
Responding to a comment about dollar stores preying on the poor with, “that’s why I shop at Costco” is… a choice.
The fact that the strategic wedge with which a successful, relatively socially-positive business manages to sustain itself isn't universally accessible doesn't negate its value.
The Venn diagram between people who shop at dollar stores and people who shop at Costco isn't empty.
This is true, but a valuable - and damning - observation that this variation in business model, that seems to be both decent and profitable, is so rare
For me it's very simple: What I save on glasses pays for my membership. I don't go all that often but it's still worthwhile.
... and a car to haul all that stuff, and time to drive to the nearest Costco.
It really is a luxury that a ton of people can't afford.
Indeed. And I say this as Costco member. There are lot of factors that make Costco memberships work. And a lot of people won't be able to make much benefit out of Costco membership.
I say this as someone who admires their business model and how they treat customers & employees: your typical Costco experience is drive to the suburbs, spend $500 and load up your car with nice to have food products and discretionary purchases. Poorer people cannot do any of these things.
Why is car a luxury? A clunker car worth $2000 will still work fine for years with minor maintenance that can be done by yourself.
Oh, yeah. Cities. Cars are expensive when you live in a 100 sq. ft. box.
Perhaps that's what is causing problems?
>While other retailers try to get me to buy more stuffs, Costco try to make sure I'm satisfied enough that I'll renew my yearly membership (their main profit source). The incentive structure aligns very well.
This doesn't make any sense. Costco makes a profit on the goods sold as well. They have every incentive to sell you as much stuff as possible. That's why they also engage in the usual retail tactics to increase sales, like having the essentials all the way in the back of the store, and putting the high margin items (electronics and jewelry) in the front. They might practice a more cuddlier form of capitalism than dollar general, but they're still a for profit retail business.
I see you're not terribly familiar with Costco. Membership fees account for the vast majority of net operating income for Costco and they keep markups on items at no more than 14% over cost (15% for Kirkland brand).
So yes, Costco does make most of its profit by ensuring customers are happy and continue to renew their memberships every year.
>Membership fees account for the vast majority of net operating income for Costco
This is financially illiterate because you're mixing revenue ("membership fees") with profit ("net operating income"). While it might be tempting to assume that membership fees is pure profit for them, it's not, because people only buy memberships because they're useful for something (ie. shopping at their stores). Therefore you can't strip that out from the other costs associated with operating a chain of warehouses.
It’s kind of a meme; Costco’s profits are almost exactly the same as their total revenue from membership fees, which leads people to think that the warehouses run at zero margin and the fees are their only profit source. The fees certainly give them room to run the sales at extremely low margins (though large grocers like Kroger only have something like 3% margins), but it wouldn’t take a huge shift in purchasing patterns to change this coincidence. If all the people who don’t use their membership that much dropped them and those who use them were all large-scale buyers, they would have to increase their prices just to give themselves a bit of cushion.
It seems to amount to a similar principle, that their business model depends on repeat customers, and would fail if they lost trust.
I much prefer this to stores that are happy to burn customers, never expecting to see them again.
>It seems to amount to a similar principle, that their business model depends on repeat customers, and would fail if they lost trust.
You think dollar general is making $37.9B (in 2023) of annual revenue from one-off customers? Unless you're operating a tourist trap, or some sort of business that people only need a few times in their lifetimes (eg. real estate agents), most businesses rely on repeat customers.
Dollar stores around here pop up in small towns, killing off any locally-owned competition, and are far enough away from the big chains to mean they can charge quite a bit more while offering terrible service.
Note how they tend to have captive customers.
Counter example: they sell their dollar hotdog and pop right at the front!
The sad thing is, people in rural areas that depend on places like Dollar General, and are getting fleeced blame everyone but republicans and they are usually in red areas
I’ll bite…
I live in a rural area with a Dollar General about a half mile from my neighborhood. For staples, it’s honestly fine. You want a 6 pack and some hot dog buns because you missed it in the Wal-Mart run the other day (15 miles away), it’s great!
You’re not getting fleeced and if you are, the gas savings alone more than make up for it (0.65 per mile per the IRS.)
For folks who depend on the local DG for, idk, clothes and household goods it might be much worse, I don’t shop for those there ever, but on staples it’ll do, especially given the density of stores compared to major chains.
The problem is that they drive out local grocery stores that were actually pretty good, have terrible safety records, and food sanitation.
Last Week Tonight did an episode on them: https://www.youtube.com/watch?v=p4QGOHahiVM
Being in a shopping rich area, I have some luxury of choosing what I get where. DG is a good option for a small list of items, about ½% of my shopping.
But it'd be awful if my best shopping option was 15mi away.
Having moved from a shopping rich environment of some 30 years to a very rural setting, I was innately trained to hate on Dollar General by my 15 years on HN. In reality, it’s a trade off. Nothing more, nothing less. Whereas before you might have fallen back on a country-store with a small kitchen and minor staples (eggs, cheese, milk) next to the RedBull most folks now have a wider variety of options at a price point comparable to or better than that filling station. All the better, DG has rolled out their “Market” concept with fresh options as well.
At this point I’d love to see a conversation about price points and convenience of a Japanese conbini as compared to a Japanese supermarket on HN. Far less politicized and denigrated I would hope.
> But it'd be awful if my best shopping option was 15mi away.
In much of the rural US, 15mi away is having your good shopping close by. A lot of areas make due with their "best shopping option" being well more than 15mi away.
The concept of "small convenience store near me" isn't the problem. The problem is that these stores are actively engaging in outright fraud. People who shop there are absolutely getting fleeced regardless of how much gas they burn getting to the store that's regularly ripping them off.
Having a small nearby connivance store and not getting scammed is an option. If the ability to get beer and hot dogs buns without having to drive to a larger more distant store is really worth the higher prices customers are getting fraudulently charged at the register, then these stores can just stop lying to customers and post the accurate prices.
If the laws were meaningfully enforced this is exactly what would happen. These stores would either comply with the law and stop committing fraud or they would be shut down, their CEOs would be sent to prison, and competitors willing to follow the law would step in to fill the need the market has for a small shop that sells beer and buns to rake in that profit for themselves.
I’m telling you from living “here” - you see just as many stories of major chains getting popped as you do the ever so scapegoatable DG chain.
I have no stock in the firm, this is just lazy feel god torch wielding here.
Here’s Target getting popped all the same: https://www.newsobserver.com/news/business/article289980944....
> Dollar stores are private equity with a checkout lane.
Dollar Tree and Dollar General are publicly traded.
So Family Dollar might be the result of PE tactics, but the other two aren't, and Dollar Tree sold Family Dollar because they saw it as under-performing.
It's actually sort of weird Dollar Tree couldn't make it work. I know the dollar stores all have somewhat different businesses, but you'd think that Dollar Tree could have either turned Family Dollar around or knew it was selling a loser (see the market for lemons) to PE.
> They already run on a thin-staff, high-volume model.
Like every other retail business not targeting the top 5%.
And Dollar Tree and Dollar General are both publicly listed companies, not private equity.
Dollar Tree sold Family Dollar for $1B 10 years after buying it for $8.5B, a pretty big loss. Dollar Tree’s market cap is $25B, so a pretty negligible part of the national dollar store business is “private equity”.
Costco
Costco purposefully targets the upper middle class to nearly the point of exclusion of everyone else. By charging membership fees, product selection, and the bulk pricing.
They could care less about the bottom 50% of the market.
Costco's revenue comes from their membership fees and their ability to strongarm suppliers to give them favorable terms (eg. Costco is one of the largest alcohol importers in the US and tends to strongarm LVMH).
I love Costco (I practically grew up at Costco as a kid), but their ICP is not the kind of person who shops at Dollar General or is on SNAP - it's very much targeted at the 50th percentile income bracket and above [0].
And this is why PE has taken over the dollar market segment - because it's a trash business that no one else wants to service over the long term. PE is basically the last resort if a business cannot raise capital from traditional avenues, and leadership and investors want to exit. For y'all graybeards think of "Sam Vimes Boots theory".
Mine Safety Disclosures did a great overview on Costco's operating model a couple years ago [1].
[0] - https://www.businessinsider.com/how-costco-sams-club-shopper...
[1] - https://minesafetydisclosures.com/blog/2018/6/18/costco
> cosplaying as poverty relief
Does it really? Who says this, and who believes it?
>> cosplaying as poverty relief
> Does it really? Who says this
(search engine: 22 relevant results in 0.85s.)
ref: https://www.dollargeneral.com/hereforwhatmatters>we’re here to provide affordable and convenient access [...]
You'd have to be incredibly naive to interpret that as "poverty relief".
> search engine: 22 relevant results in 0.85s.
Being able to understand what those results mean is the important part.
I mean, it's in the name.
You’d have to explain why you believe that. Just because someone in poverty can afford to purchase items in the store, doesn’t mean it’s good value, i.e. it’s not necessarily providing relief from poverty. In fact, it’s the opposite. See e.g. “How the dollar-store industry overcharges cash-strapped customers while promising low prices”:
https://www.theguardian.com/us-news/2025/dec/03/customers-pa...
private equity is a tumor on this country. it seems any business stained with this actively becomes worse for the customer for as long as possible.
Then why doesn't some other established brand open in the same area and undercut them?
Interesting. The Netherlands is no class society so rich or poor nobody has any goddamn shame to stand in line at the Action checkout if there's a good sale to be had.
Seeing people in BMWs at the Aldi parking lot. Strange country.
I do most of my grocery shopping at Aldi (in the US). There’s plenty of Teslas, BMWs and Mercedes in the parking lot (although late model Hondas, Toyotas and Kias are probably the most prevalent). Turns out people of all income brackets like saving money.
> The Netherlands is no class society
Americans used to claim this too. It’s invariably false. It just means that the wealthiest people do a better job of concealing, or not advertising, how vast the wealth discrepancy between them and the average person is.
> Seeing people in BMWs at the Aldi parking lot
The least wealthy person on the list at https://en.wikipedia.org/wiki/List_of_Dutch_by_net_worth could afford 10,000 high-end BMWs and still be extremely wealthy, far too wealthy to have any interest in lining up at Aldi’s for a sale.
Kudos! This is beautifully succinct, elegant, and accurate writing.
> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50. Kellogg’s Frosted Flakes, Stouffer’s frozen meatloaf, Sprite and Pepsi, ibuprofen, Klondike Minis – shoppers were overpaying for all of them. Pedigree puppy food, listed at $12.25, rang up at $14.75.
Surely, now that this made the news, there will be an investigation into the fraudulent behavior of Dollar General and Family Dollar.
Left unsaid is that both Dollar General and Family Dollar would become unprofitable if they stop tricking customers. (Both companies typically earn only 3-4% on sales.)
It was investigated, the issue is that the fines are smaller than the profit. I would personally want to see things like this considered fraud and that it can result in prison sentences for executives and other people invovled in the decision making.
Ya the problem needs to be a fine the first time, second time it’s fraud. Allow for honest mistakes. Punish for clearly defrauding customers. We really need jail time for execs making these decisions but that rarely happens.
Corporate fines should all be percentages of profits.
Pretty trivial to make profits "not exist" though if you planned to engage in fraud and wanted to de-risk it.
They're a publicly traded company. If they drop profits substantially, I imagine shareholders etc would leave.
I'm pretty sure GP was suggesting a general enforcement framework, not talking about any particular company.
Anyway no, shareholders care about much more than simple profits.
Revenue, not profit.
Or revenue?
If movie contracts are any lesson, you always want to be on the gross. Too many ways to game the system otherwise.
And that only works because the theatres aren’t controlled by the producers. Revenue recognition is its own field of ripe fuckery.
God yes
Percentage of global tärevwbue works. We know that from GDPR. But I would personally prefer prison sentences for the execs.
Some people say it's trickery, but when I apply the razor I find pricing errors more likely to be the result of stupidity than of malice.
Having worked in retail myself, I understand that some days there just isn't time to get it all done. A debt of unfinished tasks can accumulate. It happens. Sometimes old prices get left up. (I think the stupidity is on the part of management more than it is the employees, but it's still more stupid than it is malicious.)
---
Dollar General got into the thick of it with the Ohio Attorney General a couple of years ago[1] over this issue: The prices on the shelf didn't always match the prices at the register. Stores were closed[2] while they updated their price tags to match reality.
And as part of the settlement with the Ohio AG: Nowadays, when I go into a Dollar General and Red Baron pizzas are on the shelf for $5 and they ring up at $7.65, they're required to honor the posted price of $5 when I bring this up to them.
(That last bit really should be enshrined in law instead of the footnotes of a legal settlement with a single entity, but alas: It just isn't that way in Ohio.)
[1]: https://www.ohioattorneygeneral.gov/Media/Newsletters/Consum...
[2]: https://www.supermarketnews.com/foodservice-retail/ohio-ag-d...
I would like to think incompetence as well, but when the problem is this widespread, IMHO it does point to a corporate issue...even if that's simply leaving too many incompetent managers in charge. IMHO if you're the manager and the part-time teenager didn't finish updating all the shelf pricing, then it's on you to finish before going home. But today too many people just don't give a damn.
My first job was in retail as well, going back to the days before scanners when every item item was ticketed individually. When something goes on sale you ticket it again, then tear off the sale price stub when the sale ends. Repeat as needed. Maybe that could be a suitable punishment, too? Force stores to abandon shelf pricing for a period of time until it hurts enough that they get their act in order?
Hanlon's Razor is not relevant with large amounts of money at stake. in fact the complete opposite is the best approach: The more money that's involved, the more you should suspect malice until it has been conclusively ruled out.
As a company seeking to maximize profit, why would you fix this problem? It seems optimal to say "it's out of our control" -- you get to overcharge customers, and you have a reasonable explanation if a lawsuit comes.
I would be curious to see how often it's the other way around, e.g. they undercharge a customer.
I prefer to think that people (including those who run corporations at the level of -- you know -- price tags) are broadly more incompetent than they are malicious, dishonest, replete scumbags who would sooner stab a person in the back and take their wallet than give them the time of day.
It is possible that I am wrong about this.
I agree that people are usually good, but systems will be abused.
The first think I thought of was https://en.wikipedia.org/wiki/Ford_Pinto#Fuel_system_fires,_...
You're applying that razor incorrectly. These dollar stores are run with a skeleton crew, where it's impossible for the workers to keep the store in order, or to update the prices on the shelves. The prices of items at the register is managed centrally. They ensure resources exist to increase prices at the register and not on the shelves, and that's misleading and fraudulent.
This isn't a pricing error. They should change their practices to require prices be updated on the shelves, and for that to be verified, prior to the prices at the register applying (and this should be required by law).
It's funny that it's criminal when someone shoplifts from a dollar store, but knowingly showing one price and charging a higher price isn't a crime. We need to start treating corporate theft as crimes, rather than as a cost of business.
This is very American: it's illegal, but everyone accepts both that the law will be enforced very unevenly, and that this kind of thing doesn't get solved by the regular political process. There's no political consumer complaints culture, it's seen as an individual matter.
You couldn't get away with this for as long in the UK as a retailer. Either the CMA or Trading Standards would deal with it.
> everyone accepts both that the law will be enforced very unevenly, and that this kind of thing doesn't get solved by the regular political process
Nobody agrees on that. TFA follows "a state government inspector" whose effectiveness is hampered solely by a "North Carolina law" which "caps penalties at $5,000 per inspection." That law [1] doesn't exist outside North Carolina.
This is the first time I'm reading about this. We have a dollar store in my town. I'm curious to replicate this experiment myself and send the results into the local newspaper if the discrepancy is real.
[1] https://www.ncleg.gov/enactedlegislation/statutes/html/bycha... § 81A-30.1
> this kind of thing doesn't get solved by the regular political process.
Yeah it does. This is specifically the sort of thing that the FTC is in charge of addressing.
That is ultimately controlled by who the president is. There is some funding problems with these enforcement agencies that forces them to pick and chose their battles. However, you'd be naive to think that there isn't a significant difference from how Lina Khan ran things and how Andrew Ferguson runs things.
Keep in mind, this is also a state thing. I live on the NC/SC/GA border so I view news for all three daily.
I routinely see this type of crime heavily policed and reported on in NC. Whereas my entire life is in coastal SC and never once in my life saw this repeated on or enforced.
In Massachusetts it's policed and enforced but the maximum fine per inspection is $5000 so it doesn't actually do anything (and it only applies to food anyway and stores are also allowed to exempt a fairly large number of items). https://www.mass.gov/info-details/accurate-scanning-and-pric...
It was investigated. They got fined $5k. 4 times.
Is there another law that can get them for repeat abuse.
Their attorney general could also sue them, as was done in several states mentioned- resulting in much larger settlements. Only the fines by the dept of weights and measures are limited.
>> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65.
The crazy thing is that even if it did ring up at the correct price it isn't a good deal. It's around $4.80-4.90 at Walmart and Target and others.
Paying 10 to 20 cents more for an item can still be a better deal than traveling further away to a larger store. The mis-pricing is completely unacceptable, though.
But because these stores exist, they lead to grocery stores no longer existing, because they eat the majority of the profit from grocery stores. This forces people to shop at the dollar stores because it's the only thing nearby. The dollar store model increases prices, reduces consumer choice, and makes us less healthy.
It's worse than that. In many cases the dollar stores now get skus of items made for them that are "cheaper" than a sku in Walmart but for a more expensive unit price than Walmart as they shrink the product.
> Left unsaid is that both Dollar General and Family Dollar would become unprofitable if they stop tricking customers. (Both companies typically earn only 3-4% on sales.)
They could of course show the actual prices instead of tricking customers?
If the margins are so low nobody else will be significantly cheaper anyway.
Massachusetts has a quite prominent law against this.
"When buying groceries—food and non-alcoholic beverages, pet food or supplies, disposable paper or plastic products, soap, household cleaners, laundry products, or light bulbs—you must be charged the lowest displayed price, whether on the sticker, scanner, website, or app.
If the lowest price you saw for an item is $10 or less, and that lowest price is not what you were charged or not what appeared on the in-aisle price scanner, the first item should be FREE. If the lowest price you saw for an item is more than $10, and that lowest price is not what you were charged or not what appeared on the in-aisle price scanner, you should receive $10.00 off the first item."
https://www.mass.gov/info-details/consumer-pricing-accuracy-...
Not to say it's not happening in a Mass based Dollar Stores but you could be walking away with a lot of free stuff and it would be enough of a deterrent to stomp out the practice. I've had it happen at grocery stores usually at their suggesting.
Unfortunately, this type of conflict can only be adjudicated by courts, which low-income people don't have the time and money for. You couldn't just walk out of the store with the items. You'd need to either:
1. Buy the items and sue.
2. Take the items without paying, likely get the police called on you, and defend yourself in criminal and civil court.
3. Point at the sign, which is posted at every register, and ask for your discount. If they say no you ask for the manager. I've done this several times, and never had an issue (but sometimes it takes a little while).
> this type of conflict can only be adjudicated by courts, which low-income people don't have the time and money for
Massachusetts has a strong consumer arm at its AGO [1] and consumer regulator [2].
The problem is less one of cost of litigation than education about available options. (And the time to pursue them.)
[1] https://www.mass.gov/how-to/file-a-consumer-complaint
[2] https://www.mass.gov/orgs/office-of-consumer-affairs-and-bus...
Theoretically there is a third option, stay in the store near the cash register and call the police to come deal with it on the spot before the purchase. The problem is that they probably won't bother coming, and if they do, they won't come quickly enough to make it worth waiting for them given the amount of money at stake.
Edit: Yeah, I did say before the purchase, but I should have said after the purchase when they pay the legally correct price but the store accuses them of shoplifting and tries to detain them. And I know it's often infeasibly hard to pay the legally correct price from a logistical perspective without the cashier's cooperator, especially if you want to pay with a card. It is clearly possible to put at least the right amount of cash on the counter, ask for the change, and attempt to leave if they refuse, but that doesn't guarantee ever getting the change. Anyway, I did list this option as (purely) theoretical and not as actually practical.
this is a tort not a criminal act - cops wouldn't/couldn't do anything.
In a lot of places in the US, the lower of the shelf price and the scanner price is by law the most they can demand, at least for retail sales to consumers. Attempts to stop the customer from leaving after having paid the legally appropriate amount would be criminal acts by the store, no?
Have you seen the cops here though? Good luck trying to argue it when they’re loving you up for “shoplifting”. They’re going to side with the store.
I did call it a theoretical option and not a practical option. Although they might be a little more sympathetic to someone who is white, in a business suit, has a photo of the shelf price on their phone, can confirm that a surveillance camera captured them paying the shelf price, and is lucky enough to either get a cop who knows about the local price accuracy law or can point the cop to a visible posted sign about the law in the store.
Not to mention that cops only have powers to arrest/issue tickets, not to adjudicate disputes. This isn't Judge Dredd where cops can mete out judgements as they see fit. That's the whole reason why we have courts and judges.
It's not about adjudicating disputes in an arbitrary sense, it's about enforcing consumer protection laws about prices displayed and then charged at retail. Many places legislate that the lower of shelf or scanner price be the maximum price charged.
>It's not about adjudicating disputes in an arbitrary sense, it's about enforcing consumer protection laws about prices displayed and then charged at retail.
This is a fundamental misunderstanding of how the legal system works, at least for common law ones. When cops "enforce" the law, like arresting someone or towing a car, they're only allowed to do it because there's some immediate need. In the former case, it's because having a criminal roaming around the streets is a danger to society, and in the latter case because the car is blocking traffic and needs to be removed. In both cases you still need a judge to ruled that the person actually shoplifted or parked illegally. None of these factors apply in a dispute over pricing, and it's not the police's job to strongarm the shopkeeper to accept the lower-marked price. Indeed, in the two examples, there are often cases where no actions are taken at all, for instance issuing a summons instead of arresting someone, or issuing a ticket instead of towing a car.
> When cops "enforce" the law, like arresting someone or towing a car, they're only allowed to do it because there's some immediate need.
Not at all true. They can enforce the law because there's a law being violated, not because there's an immediate need for the enforcement.
> In the former case, it's because having a criminal roaming around the streets is a danger to society, and in the latter case because the car is blocking traffic and needs to be removed.
There are so many cases where cops can arrest someone who isn't being a danger to society in any way, like someone who illegally crossed the border into the US (a criminal misdemeanor) and is otherwise fully law-abiding. Or for an example under state law, a cop arresting someone who is intentionally underpaying state income tax (criminal tax evasion) has no immediate need to take that person into custody before conviction but is 100% allowed to do so if probable cause exists, at least until the initial bail hearing.
> In both cases you still need a judge to ruled that the person actually shoplifted or parked illegally.
Not before a cop gets involved, no. The judge comes after the cop.
> None of these factors apply in a dispute over pricing, and it's not the police's job to strongarm the shopkeeper to accept the lower-marked price. Indeed, in the two examples, there are often cases where no actions are taken at all, for instance issuing a summons instead of arresting someone, or issuing a ticket instead of towing a car.
This has nothing to do with strongarming the shopkeeper to accept a lower-marked price in the sense of an ordinary pricing dispute between private parties, it's about enforcing state or local laws that regulate this in cases where a shop is violating applicable laws.
It is true that many of these laws only allow administrative fines in response to complaints or inspections, not anything as proactive as I was describing. The theoretical viability of my idea of simply leaving with the item after paying the legal maximum price at the cash register and involving the cops if stopped actually depends on state contract law, and likely specifically its judicial precedents: if that state would view the buyer's offer to buy at the shelf price as accepted on the terms of the store's invitation to treat since the counteroffer from the cash register's scanner was illegal, then title transfers to the buyer at the time of payment and an attempt to stop them from leaving would be a crime that the cops could in theory be called for. If the state would view the buyer's offer to buy be rejected even though the counteroffer was itself illegal, then yeah the only available enforcement is the administrative complaint / inspection / fine procedure and the buyer never gains title to the property. I expect this legal conclusion would vary from one state to another.
I think we all agree that this theoretical option is very rarely practical, and I'm not pretending otherwise.
>There are so many cases where cops can arrest someone who isn't being a danger to society in any way, like someone who illegally crossed the border into the US (a criminal misdemeanor)
Does only committing a "criminal misdemeanor" somehow exempt you from arrest?
>Or for an example under state law, a cop arresting someone who is intentionally underpaying state income tax (criminal tax evasion) has no immediate need to take that person into custody before conviction but is 100% allowed to do so if probable cause exists, at least until the initial bail hearing.
Right, because arresting people who refuses to show up to court is needed for the justice system to work at all. Otherwise people can just shirk their court dates and never face judgement. There's plenty of other reasons to arrest people besides the two examples I provided, they're not supposed to be exhaustive.
>This has nothing to do with strongarming the shopkeeper to accept a lower-marked price in the sense of an ordinary pricing dispute between private parties, it's about enforcing state or local laws that regulate this in cases where a shop is violating applicable laws.
This makes as much sense as calling in the cops to report health code violations.
> Does only committing a "criminal misdemeanor" somehow exempt you from arrest?
It does not - and that's exactly my point! Cops are allowed to arrest that criminal even though there's no immediate need to arrest them. So, immediate need is not a prerequisite to cops arresting someone.
> Right, because arresting people who refuses to show up to court is needed for the justice system to work at all. Otherwise people can just shirk their court dates and never face judgement. There's plenty of other reasons to arrest people besides the two examples I provided, they're not supposed to be exhaustive.
Yes, but cops are also free to arrest people who they are confident will show up to court, if there's probable cause that they've committed a crime. Again, the point of that example was that immediate need is not required before a cop can arrest someone.
> This makes as much sense as calling in the cops to report health code violations.
I agree that it would be best if there were a separate agency that could respond on the spot for this type of issue, other than the regular police department and other than a slow administrative complaint/inspection process which doesn't lead to enough of a fine for stores to change their processes.
But I was discussing the possibility of the sale completing according to the law and the store trying to stop the customer from leaving with their purchase because they didn't pay the illegal overcharge. That would indeed by a crime attempted or committed by the store, assuming the law considers the sale to have been completed, and that is indeed something within the scope of what cops can handle.
To use your health code analogy: sure, in general, administrative complaints are the way to handle health code violations. But what do you call it if a restaurant worker sees something which they know or reasonably should know is toxic to humans spill into a customer's order, and then they serve it to the customer anyway without a warning? Yes, that's a crime as well as a health code violation. There are plenty of cases where cops can legitimately be involved in things that can also be handled administratively. Whether or not cops are likely to respond in useful or timely ways is a completely separate question from what the law allows.
(Tangent: Cops also quite often handle administrative fines of even smaller magnitude than what we're discussing here, but usually when the aggrieved party is the government and the wrongdoer is a random individual, like issuing non-criminal $60-100 fines for not paying a public transit fare of a couple of dollars. It's rare for them to do it when the aggrieved party is a random individual and the wrongdoer is a business.)
Call the police to come deal with...mispriced items? That's not the job of police, sorry. Not in the US anyway.
Call the police to stop a store from criminally restraining the freedom of a customer to leave with their purchase after the customer pays the legally mandated maximum price which is often the lower of shelf and scanner price, yes. That's not going to be a high enforcement priority for the police, but it's absolutely a crime if the store does that.
>Call the police to stop a store from criminally restraining the freedom of a customer [...]
Realistically no store is going chase after the customer for that, but that doesn't mean the average shopper is going to risk arrest/banned (for what the store essentially sees as shoplifting) to send a $2 message over the price difference. And all of this assumes your novel legal theory is actually correct.
It's not a novel legal theory, But yeah, I did call it a theoretical option, not a practical one. I don't pretend that it's practical.
Your original idea of "paying the marked (lower) price, walking away, even if the cashier corrected you with the higher price" certainly is novel. Otherwise can you link any sort of judicial ruling or even a random lawyer that agrees with you?Otherwise this looks suspiciously similar to all the spurious legal theories that sovereign citizens have, about how they don't need a drivers license because they're "traveling" or whatever.
I said the legally maximum price is often the lower price. NYC is an example with a law about this:
https://www.nyc.gov/site/dca/consumers/10-things-consumer.pa...
Similar laws exist at the state level in NY, in other NY counties, and in several other states and subdivisions of other states across the country.
In that case, the higher charge is clearly illegal (no novel theory needed), so standard contract law theory could consider the terms of the buyer's offer to purchase to be the terms of the invitation to treat in the absence of legal contrary terms offered at checkout. I guess it's possible that the court would say that the store never agreed to sell the item at all by demanding an illegal price instead of being considered to have accepted the buyer's offer on the posted terms, but there's only so much tolerance a judge would have for that kind of defense by the store - after all, it's very likely that the customer would have an unjust enrichment claim against the store for the amount of the overcharge if they were to pay the illegal higher price, and that wouldn't be true if the illegal contract term were valid.
The precise answer may vary by state based on judicial precedents about illegal terms in contractual counteroffers following an offer to buy made pursuant to an invitation to treat.
None of this is practical for almost any chain dollar store overpricing victim to pursue, but I am just talking theoretically here.
Call the cops to come deal with someone threatening to make a false police report about you.
If you walk out and it goes to court you will surely lose. You may have started with the right to get it for nothing but you cannot realize that right by force. Self-help is almost always illegal in any case of disagreement between parties.
Yeah, but someone living paycheck-to-paycheck and shopping at dollar stores is likely not someone who can afford filing a lawsuit.
If it’s common enough it sounds like it could be some fun pastime for lawyers.
> Unfortunately, this type of conflict can only be adjudicated by courts, which low-income people don't have the time and money for.
Here in Europe, we have consumer protection agencies. Get wronged? Shoot them off an email and they'll take care of it. And overcharging at the cash register? That gets handled by the responsible authorities. Again, call them, tell them what happened and it can get real messy real fast.
I was having trouble getting Verizon to unlock an iPhone that had been purchased (not financed) from Best Buy and that had been on Verizon's network for more than two years. Verizon support said only BB could unlock it[^1]. I thought that was poppycock. I filled out a form on the FCC's web site just before midnight. By 8 AM, the FCC had forwarded the complaint to Verizon. By 9 AM Verizon executive relations called me. 30 minutes later the phone was unlocked.
Which is all to say, for some things, the US also has consumer protection and it's great when it works.
[^1]: Apparently only Apple sells unlocked iPhones. iPhones purchased at other retailers carrier-lock themselves at activation. At least on Verizon they're supposed to automatically unlock after 60 days. When that doesn't happen, you get stuck in Verizon's mindless customer support swamp[^2,^3].
[^2]: https://old.reddit.com/r/Bestbuy/comments/17ae8l2/verizon_sa...
[^3]: https://old.reddit.com/r/Bestbuy/comments/1buemp5/why_is_it_...
Yeah, I've had a similar experience with a phone company trying to hold a number hostage. Yes, the bill was unpaid, but I was not the one liable. (My phone on a company account, the company was going under.) Letter to the regulators, very promptly fixed.
I bet you didn’t try that this year when every single part of the federal government is actively trying to harm people.
We have such agencies over here as well. Most states have some sort of weights and measures agency that handles inaccurate price scanning complaints.
I can't say how effective they are at remediating small figure issues, but no company wants to hear from them regardless.
We have those agencies as well. They've been steadily gutted since their inception, and the courts (well, the Court) don't care.
You may be referring to the CFPB but states tend to have their own agencies that have nothing to do with SCOTUS or the federal government.
And yet, here we are, with the terrible state of affairs for consumers.
Not only that, but they post a sign about this at every register. (That must be required.) So you can point to the sign. I think a typical store manager would comply. Maybe I'm not cynical enough.
Yup. My local Star Market was pretty bad about this, so I started paying close attention to prices on the shelf and at the register. Pretty soon I was taking home free items every shopping trip. (I also reported them to Inspectional Services when aisle scanners were broken or prices were particularly egregiously missing or wrong.)
Some of the cashiers had to have it explained to them with much pointing to the sign that hangs on every register; others knew the drill and called a manager over right away.
After about 6 months they started shaping up. Maybe the store manager got fed up, or maybe corporate stopped having them skimp on sticker hygiene.
From the article:
> In one court case in Ohio, Dollar General’s lawyers argued that “it is virtually impossible for a retailer to match shelf pricing and scanned pricing 100% of the time for all items. Perfection in this regard is neither plausible nor expected under the law.”
...but in my experience, they're perfectly capable of doing the right thing, given appropriate incentive and enforcement. In particular I noticed that this really varies from store to store, even in the same chain.
> ...but in my experience, they're perfectly capable of doing the right thing
It's both true. Given that a typical store can have thousands of SKUs displayed, mistakes will _always_ happen once in a while. A forgotten price tag, an incorrect sale price, etc.
But at the same time, stores are more than capable of having a system to _fix_ these issues as soon as they are detected. It doesn't even take much, just a way for a cashier to flag an inconsistent price for someone at the back office.
So this means I would get the app-only sale price, without using the app?
While doing some research into state retail pricing laws a few years ago, I discovered how tough Massachusetts is, being one of the last holdouts mandating ticketing on all items, and only relenting in exchange for price scanners every so many aisles. Living in Pennsylvania and annoyed by stores tying their best prices to their apps, I fancifully emailed Elizabeth Warren, asking if she'd prod a friend in state government to consider a legislative end run around apps. I had no idea such a law really existed. "First in the nation" I expect. Wonder how long it's been around?
Probably doesn’t apply for most app pricing, since those are typically advertised as “digital coupons” or the like in the fine print.
I can’t help imagining that the likelihood of successfully arguing for a free product with a DG cashier is slim to none.
> But North Carolina law caps penalties at $5,000 per inspection, offering retailers little incentive to fix the problem
This is a huge problem with all manner of laws in the US. We are not willing to insist that fees be limited only by their ability to prevent the prohibited behavior. Fines should continually escalate, if necessary until the offender is bankrupted, at which point their assets are taken. If Dollar Tree keeps doing this, the fines should eventually reach into the hundreds of millions of dollars, even the billions. Such penalties should also apply to company executives and board members who are responsible for the company's overall conduct.
It looks like North Carolina’s previous Weights & Measures law was entirely criminal. So in 1991 they added civil powers, but curtailed the fines.
The solution here appears to be less in raising the civil fine and more in criminally investigating, to start with, the store manager [1].
[1] https://www.ncleg.gov/enactedlegislation/statutes/html/bycha... § 81A-30.1
It is important to understand that Dollar General and Family Dollar serve thousands of flyover communities where there are no Walmart stores or other viable market access. Dollar General has stated that it can generate profits in communities with fewer than 1,000 homes. Walmart generally requires a much larger population base for its stores.
Dollar General is the largest retailer in the US by number of locations, with over 20,000 stores across 48 states. Family Dollar operates over 8,200 stores. Walmart's U.S. store count is significantly smaller (around 4,700 U.S. Walmart stores and 600 Sam's Clubs as of 2024).
Dollar stores are frequently found at the heart of "food deserts," which are often rural communities located more than 10 miles from a grocery store selling fresh produce—a gap often created when a community is too small to maintain a supermarket or attract a retailer like Walmart.
I am not an attorney, but given that Dollar General and Family Dollar are highly likely to serve a much larger percentage of SNAP-eligible customers, isn't there a far more serious FEDERAL crime being perpetrated here of retailer abuse and fraud in the Supplemental Nutrition Assistance Program (SNAP), often referred to as food stamp fraud? That is, if the SNAP customers have no other means of purchasing food (living in a food desert), and the retailer is intentionally charging more for food items, isn't the retailer committing fraud against the US government? Federal criminal prosecution of SNAP violations could result in fines up to $250,00 and imprisonment up to 20 years. More significant consequences than otherwise being reported here.
In Australia, according to the Australian Competition and Consumer Commission:
- Businesses must communicate clear and accurate prices prior to consumers booking, ordering or purchasing. They must not mislead consumers about their prices.
- There are specific laws about how businesses must display their prices.
- Businesses must display a total price that includes taxes, duties and all unavoidable or pre-selected extra fees.
- If a business charges a surcharge for card payments, weekends or public holidays, it must follow the rules about displaying the surcharge.
- If more than one price is displayed for an item, the business must charge the lowest price, or stop selling the item until the price is corrected.
In practice, if the checkout price is more than listed price, many retailers give the item for free. It doesn’t stop dodgy constantly fluctuating ‘on sale’ pricing…
https://www.accc.gov.au/business/pricing/price-displays
Requirements about surcharge notifications and displaying all-up prices are nice, but the gap here will still be about enforcement and not regulation. The core problem for dollar-store shoppers in the US is about getting the retailers to honor the sticker price, not whether the sticker price shows all state and local taxes.
Is the Australian shopper protected simply by a stronger culture of adherence amongst retailers or is it because regulators inspect more often and take stronger action against failures?
Regulators take tip offs and if one gets through, the enforcement action is usually pretty fast and strong.
They also like doing this. The ACCC makes a huge deal out of parading their latest conquest in the media.
Has its faults, the ACCCs dealings with telcos are especially terrible.
I still have friends at an Applecare provider based in oz, and they had a big one where as a settlement with the ACCC over trying to have it both ways with consumer law, they agreed to provide repairs or replacements for like a decade of wrongfully denied hardware issues. Hushed it right up. It was in lieu of a public apology from memory. But my friends spent weeks calling back old customers, chasing new contact details etc, to try and get them all free replacements.
Yes, probably difficult to compare regulation and inspection.
As for enforcement, ACCC recently took Microsoft to Federal Court for hiding Copilot pricing shenanigans, as discussed: https://news.ycombinator.com/item?id=45721682
I guess it might be a cultural thing? The shelf price is the binding price here in practice. If you get to the register at the supermarket and the price is higher, you can just let them know and they will send someone to check the price and match it.
Yes, seems to be partly regulation and enforcement partly cultural in a voluntary code of conduct that tends towards benefit to the consumer. For example,
[All the major grocery retailers] are signatories to the voluntary code of practice for computerised checkout systems in supermarkets. Generally, this means that if an item is scanned at the checkout at a higher price than it says on the shelf or as advertised, a customer is entitled to receive the first item free and all multiples of the same item at the lower price.
https://www.choice.com.au/shopping/consumer-rights-and-advic...
This practice not just matches price (dang, you caught us out this time), but incentivises minimising errors (oops, our bad, have it for free).
23% of items are rung up at a higher amount at the register than what it says on the shelf, yet North Carolina law caps penalties at $5,000 per inspection, offering retailers little incentive to fix the problem.
In other words, regulatory capture at its finest, over the backs of the poorest in the country.
Depending on how much independence the inspectors have they could probably turn a heck of a profit per inspector (thus being able to argue their continued existence to the legislature).
Could an inspector manage two per day? If you figure the full cost of each inspector is $150,000/year but dedicated ones could do 8 inspections at $5k each per week, there's well over $1 million/year per inspector (assuming not all inspections would be the full fine, there's travel costs per inspector, inspectors would have to spend some office/court time, etc. that would bring it down from the potential maximum of ~$1,800,000 each factoring in vacation and holidays).
Even Republicans could get behind it! "We're reducing the direct budget of the department, but authorizing it to hire additional inspectors in order to bring in additional revenue that can be utilized to bring the budget to or above its current levels." It's a cost reduction measure!
It’s not regulatory capture unless the regulatory body itself is controlled by shady grocers. This is just garden variety insufficient regulation. Although if they inspected every day it would probably still be profitable for the state.
The rich own congress. At this point, it's all regulatory capture.
While I agree, for the most part this comes under state regulations. Especially red states are always trying to cut taxes and the government at the cost of not having enough inspectors.
Say what you will about the EU, but they figured out how to scale corporate fines correctly: max 10% of owning entities annual income.
Why are fines capped?
Maybe it's like unlimited PTO, without a cap nobody actually uses it.
Seems like it actually creates an incentive to go big or go home. If you're already going to be busted and hit with the maximum fine, might as well have even larger mispricings, so you come out ahead after the fine is taken into account.
What this calls for is an Amazon-style optimization of inspections. Given X inspectors and Y locations, what is the most optimal routing to optimize for coverage and penalty collection?
Better optimization would be to make everybody an inspector. You catch a store doing it on video and report it to the agency, you get 50% of the fine.
In Australian supermarkets when the price of the item is wrong you get the item for free. (At least it was like that in 2011). Cashiers would run into the store to go fix the price tag.
Amazon-style optimization? You mean they send three different inspectors to the same store on the same day, each scanning one third of the necessary items for the audit?
Offtopic, but I made the mistake once of buying groceries from Amazon and they instead sold me a package of cheddar cheese that was completely blue from mold. Some "quality" inspections they got going don't bode well for public-private "partnerships" that outsource essential government functions to a corrupt third-party that's likely to be owned by a craptastic private equity hedge fund.
The error rate is nonzero, but in my experience Amazon will make it right with little friction. A short chat is almost always enough, no labyrinthine phone trees or escalations.
Last time I had to contact Amazon the chat option was no longer anywhere to be found. I gave up and actually called. They were nice enough on the phone but it was a good reminder of how much Amazon’s customer service has degraded.
Yes, but all problems with tainted food are not as visually obvious as mold. After some bad surprises, I've decided to never eat anything I ordered from Amazon.
> yet North Carolina law caps penalties at $5,000 per inspection
So, have every agent in the state inspect them. Fine 5k. Immediately inspect again, different goods. Fine another 5k. Keep doing it opening hours.
Treat them like an inspection money piñata until they fix their ways. State gets a big pile of money to do better, and massive fines at 5k a pop for a few weeks punish the company and their bottom line.
Why are we taking this whole “the $5k fine is nothing” thing at face value?
A long time ago I used to help manage a couple retail stores. A $5k random expense would have put that location into the red for the month. Perhaps not the volume of a dollar store chain, but certainly not small either.
I have a feeling that if the $5k fines were basically guaranteed to happen with some regularity you’d see this cleaned up pretty quickly with local management replaced ASAP if not.
Enforcement doesn’t have to be over the top abusive with the goal to put a location out of business overnight. Especially in already underserved communities. Like everything to do with humans there simply needs to be consistent, reliable, and timely consequences to form a reliable and immediate feedback loop for behavior.
If a store makes it an actual policy to eat these fines then the fine amount needs adjusting. From everything in this article though the problem is simply it’s worth the gamble they don’t happen at all.
I mean, more like someone elected and really high up in the state government calls the inspection office and tells them to stop, or everyone at the inspection office will get fired, since said elected person cares far more about getting reelected then the people that they should be representing.
I don't know NC law. Does it have an "invitation to treat" practice there where prices marked are a customer relations issue rather than a legally-binding offer?
To attain change, enough people have to:
1. Correctly identify the source of their misery, because it ain't [insert scapegoats].
2. Find others who agree with them.
3. Make a plan for effective countering of 1.
4. Use intestinal fortitude and endure temporary setbacks to achieve 3. to overcome 1.
5. Prevent 1. from ever happening again structurally, culturally, and through vigilant participation.
The 0th problem is the political operating system is captured by criminals and power has centralized grotesquely in ways that defeat the fundamental function of separation of powers. All elected officials corrupted by lobbyist bribes need to face accountability and have a code of ethics and integrity, because continuing down this path is the road to ruin.
I don't think the laws of the specific jurisdiction matter. In every US jurisdiction, the prices aren't completely legally binding (what if the previous customer changed the price tag?). In ~every US jurisdiction, if you systematically show one price but charge customers another, that's an offence.
So intent matters. What would decide an individual case is not the exact characterisation of the laws on the books, but how sympathetic a regulator or a judge is to the supermarket's claim that these things just happen sometimes.
If another customer changed the price tag, that would be in the same category as if a person unaffiliated with the store said "I'll give you a deal on this item for $10", then pocketed the money while you walked out with the (still not yours) item. This doesn't really have any bearing on whether the owner of a store putting up a sign with a specific price for a specific item that a customer can directly take possession of constitutes a binding offer.
Sure, but it's in the same category as the owner putting up a sign by mistake, or omitting to update a sign by mistake. Or more realistically, an employee of the owner putting up a sign even though the owner had instructed him to put up a different sign.
> or omitting to update a sign by mistake
No, in this case the shop is legitimately offering an item for sale, and then forgetting to change the price they are offering it at. It's quite disingenuous for a shop to put up signs, and then act like those numbers aren't legally binding, while the real prices are hidden away in a database somewhere. If they want to have their database be the authoritative copy pricing information, then they can just not put up price signs to begin with.
> NC law. Does it have an "invitation to treat" practice [...] rather than a legally-binding offer?
Are there any common-law jurisdictions in the world where having products on sale in a supermarket is not generally considered invitation to treat but as an offer to sell?
What is an invitation to treat, and how does a store with items on the shelf not constitute an offer to sell?
The invitation to treat is the store inviting potential customers to treat (engage in commerce) with the store by submitting an offer to buy the displayed items at the listed price, which they usually do by bringing the items to the register or (for more specialized purchases) telling a store employee that they want to buy the item. When the buyer makes the offer, the cashier accepts the offer on behalf of the store by ringing up the purchase, and the buyer performs their end of the contract by paying the price, thereby contractually gaining ownership of their purchase.
One reason it works this way is that treating displayed items as an offer to sell would leave it unclear to whom the offer to sell would be made. Clearly each item on display can only be sold to one of the many shoppers who sees it, so they can't all be offered the sale. There are several other reasons too, like different customers being offered different terms of sale based on loyalty program membership, promotions, student or senior discounts, etc.
Here is the Wikipedia summary: https://en.wikipedia.org/wiki/Invitation_to_treat
As the article says, the term in various US jurisdictions may be slightly different, like invitation to bargain, but the basic concept is the same. (I'm ignoring Louisiana entirely, which has a completely different legal tradition not derived from English common law.)
America The Beautiful
Regulatory capture is when a large company encourages stronger regulations that small competitors cannot afford to satisfy. Here the issue is regulation that is too weak, not too strong.
No, that’s just one form of regulatory capture. If this legislation is a result of lobbying from retailers opposing imposing meaningful fines, particularly if the state of things before its adoption was that penalties from failed inspections were often higher, then this is regulatory capture.
When I worked grocery retail when I was a teen 20ish years ago, any time a customer disputed the price of something during checkout, we’d have someone check the shelf and find the display tag. If the price was lower as the customer suggested, we’d always give them the item at the price listed on the display tag. An employee usually just missed that tag during price change day.
It’s so foreign to me that any retail place would defer to “the computer” if display price and database price were out of sync.
Even young-me understood the idea of “oh yeah, our bad, have it at the lower price” and the potential for legal action if we did otherwise.
These stores often only have 1-2 employees working at a given time.
video if you're curious: https://www.youtube.com/watch?v=p4QGOHahiVM
Yeah, that "computer error" explanation is bullshit, probably rooted in a combination of CYA and narcissism.
When I worked in retail, we only had one database of pricing. The shelf tag and sign printers, the registers, the whatevers -- they all used that same database. If a shelf tag was printed at the same instant that an item was rung up, then they'd have had the same exact price.
There's mechanism for the prices to deviate.
(And yeah, pricing errors still happen at least because people are people. We make mistakes. We forget shit. We can even convince ourselves that we did a thing even if we didn't. We err. Even if we're absolutely honest with ourselves and others, we can run out of fucks to give. It's all part of our condition.
But of course: When a price was posted wrong then we fixed it once it was brought to our attention. The customer got the price that was posted, and the posting was changed.
For my own purposes, I had a habit of pulling the incorrect price tags and taking them with me back to the register; I'd just give them to whatever manager when they would show up with the key that was required for precise price adjustments and get back to doing whatever it is that my primary job was at the moment...which, if I were handling a register, meant something other than printing shelf tags.)
You need to think like an owner/operator to understand why you would defer to the system.
It’s to prevent employees from stealing. To “defer to the tag” requires a manual price override of some sort, which becomes an abuse vector.
I noticed my local wal mart doing this, not on every product, but more than one. I had hoped it was an honest mistake until it happened on my next visit. I told an associate about it, left my groceries, and I haven't been back. It's wild to think that a few decades ago they accepted returns of any product based on trust, no questions asked, regardless of whether you had a receipt.
If the goal is to fix the behavior instead of just documenting it, the penalties need to escalate with repeat violations. The first mismatch can be treated as an honest mistake. But when the third or fourth inspection still shows the same pattern, the fine shouldn't be the same $5k: it should jump sharply. At some point the cost of ignoring the problem has to exceed the profit from letting it continue.
Right now the incentive structure is backwards. As long as the downside is fixed and small, large retailers will keep treating it as business-as-usual. A tiered system tied to repeated violations would at least push them toward actually fixing the issue, instead of just shrugging it off every time they get caught.
Even if they accurately charged shelf prices, these places are still a ripoff targeting the vulnerable. The list price is low but the per-unit price is astronomical compared to grocery store prices.
While that can be bad, sometimes you come out ahead after accounting for spoilage, time, and travel.
Sometimes I pay higher unit prices at a dollar store intentionally because they offer smaller package sizes not offered elsewhere and I only need the smaller amount. I could get a much better unit price at another store but would waste the rest of the product.
Speaking of travel, that's why I go for them.
If I'm going for a multi-day stay somewhere and I don't want to deal with annoying mini bottles of hotel soap, I'll just pop into a Dollar Whatsit for a small bottle of something suitable at my destination.
I lived for an entire year out of just Dollar General and Dollar Tree. In some rough areas they are the only stores where you can buy groceries, so they have very clear monopolies. There are good value products, and like everything these days you have to use their apps to get the best offers. Also, the Dollar General app lets you check the price of everything before you take it to the counter. They regularly have items marked up at 1 cent.
The "dollar stores" vary.
I've been able to find good deals on some things at Dollar Tree. Usually the good deals were a smaller quantity of a normal-quality brand-name item. I mostly avoid the substandard quality items. But even sometimes substandard is OK if, say, you want to make your political demonstration sign on white foamcore (much cheaper than the art supply store, and you don't care if it's smaller, thinner, or outgassing) rather than on an Amazon shipping box.
There was a Family Dollar across from a large public housing project here, where I also went looking for deals, but the shelf prices looked like a convenience store. I didn't find out whether they were fraudulently charging even more at the register like this article describes. (I hope it closed because the residents knew there was an affordable Market Basket a 20-30 minute walk away, over the city line and train tracks, and they were able to get there and find the time for it.)
>>> rather than on an Amazon shipping box.
My wife attended a political protest, and said she noticed signs made from my employer's shipping boxes.
That's great, and a mix of all kinds of signs is to great effect. (People from all sorts of demographics using whatever means they can to be heard.)
Sometimes the sign-makers are artistically inclined, and may have access to better materials.
The most memorable example was at the political demonstrations (and counter-demonstrations) leading up to the Massachusetts constitutional convention that legalized gay marriage. For the State House one I photographed (learning photojournalism on the side), the anti-gay-marriage people were mostly bused in, including a pair of angry-looking old nuns in black full habit, and handed out the same ugly stock sign. (There's an obvious joke that they couldn't find a graphic designer who was sympathetic to the anti-gay cause.) Separated from them, across a street was a huge counter-protest, with an ocean of all sorts of creative, colorful, and positive handmaid signs, held by generally good-natured and thoughtful looking people.
Saying it only targets the vulnerable because of high unit prices is like saying the local gas station is a rip off that only targets the vulnerable because prices are higher.
I lived in a city that’s in North Metro Atlanta (Johns Creek) where the median household income was $160K. There was a Dollar General right by a Publix. People still went in the Dollar General for little things where the small packages that you could buy was feature and not a bug.
We still stop by the dollar store for snacks sometimes because it is convenient just to get things to pack for a flight. It’s especially popular for tourists in Orlando where I live
There is one near Naples in Florida I go to often just for the insane drink discounts compared to the Publix or Wawa or the Walmart Neighborhood Market thing across the street.
Have you ever been to a dollar store? Its much cheaper for the same items than a regular grocery store. Also not everyone needs a Costco sized tub of mayo. You test it yourself go by a standard sized candy bar at safeway/alberstons and then at a dollar store. Bottle of coke. Birthday card. Better yet compare the cost spices. Try to buy bay leaves at regular grocery store for under $5.
Candy bars and soda sure whatever. Look at essentials. The dollar store near me charges $1.99 for 8oz of Tide, the Albertsons a single block further charges $9.99 for 84oz, the dollar store is over double the cost. It's the same story with soap, cleaning products, etc. A tiny container for cheap feels like a deal if you can't do the math, but it's not. Feel free to "test it yourself."
I'm lucky in that I have a real grocery store nearby to compare to. If you live in a food desert where these big chains have driven out all competition you wouldn't have a choice.
It's not only the math but access to cash. Families living paycheck-to-paycheck struggle to make long-term investments. Paying 5x for larger quantities may pay off in the long-term, but if you're struggling to make ends meet and stretch dollars today, it might be overwhelming.
>Sam Vimes ‘Boots’ Theory of Socio-Economic Unfairness
in action.
There's variations in dollar stores, and in packaging, and deals, and everything else.
Let's play with Tide, and with Kroger and Dollar General just because those are the two retailers that are near to me. We'll do biggest and smallest, and start with the smallest.
---
The smallest bottle of original Tide that the Dollar General near me has is 34 ounces for $6.00: $0.1765 per ounce.
The Kroger near me has a similar, but lesser, bottle as their smallest offering: 32 ounce bottles for $5.99: $0.1872 per ounce.
Dollar General wins on smallest.
---
The biggest bottle of Tide at Dollar General is 115 ounces; regularly, $16.95 ($0.147 per ounce). On sale for $15.95 ($0.139 per ounce). With a $4-off digital coupon, $11.95 ($0.104 per ounce).
At Kroger: 132 ounces for $19.99 ($0.151 per ounce). (With a $5-off-of-$25 digital coupon if I feel like giving Proctor & Gamble even more of my money in one transaction.)
Dollar General also wins at biggest. They win at regular price, and today they also win at sale price.
shrug
---
Convenience also has a cost. For instance: I ran out of cat food on Christmas Day. Everything nearby was closed except for a Circle K, so I walked over there to see what they had. And they had cat food (of course they did). I bought the smallest container of Purina dry cat food I've ever seen for ~$9.
That was a lot of money for such a small amount of cat food, but I was happy to pay it. They had the right product in the right place at the right time. (And most importantly, the cat was happy.)
And what's the problem with that? You get a discount for buying larger amounts of basically everything.
Dollar stores are crowding out grocery stores in areas that only have the clientele to support one grocery store. They sell only higher margin, long shelf-life shit food, whereas real grocery stores have to carry produce which cuts into margins considerably cause it goes bad. So it's easier for them to stay open. And they create food deserts there. They are a fucking scourge for small towns.
Sounds like the grocery stores were not serving their customer base well if they couldn’t compete with “overpriced” dollar stores.
Carrying cost of produce does not add up. If produce is going bad at that spoilage rate the store management fucked up and didn’t order the correct amount of product for the location. You can’t wish your way into a product mix.
Nothing was stopping grocery stores from identifying this need. Pretending your customer base is more affluent than it is sounds like a quick way to go out of business to me.
Then feel free to explain the studies and articles online describing how dollar stores are fucking rural grocery stores.
Explain why rural customers prefer the dollar store to the grocery store? Are they just stupid and don't know what's best for themselves?
Perhaps the rural grocers are not carrying the appropriate product mix for their current (new?) customer base, and are overvaluing customer service?
I don't like it - but I also spend time in rural communities and see why these places beat the local grocers. They offer better value for the dollar. Often they are indeed cheaper on a unit cost basis, much less overall per transaction.
It's sort of like folks screeching about "food deserts" in urban communities I've lived in, thus enacting laws forcing fresh produce be carried by the local convenience stores. That produce simply rotted on the shelves since - surprise! - the local business owners knew their customer base better than a bunch of do-gooder ivory tower academics did.
You can make some strong cases for Walmart putting Main Street rural America out of business using predatory pricing schemes and the like. It's a lot more difficult for dollar stores.
They do not offer better "value on the dollar" they offer units that individually cost less but over a year of buying what you need to survive you pay more. That's how items are generally priced; smaller packages, higher unit price (as in, price per ounce).
You shouldn't say "screeching" if you want to be taken seriously, it makes you sound shallow and dismissive, incapable of understanding how your narrow outlook is not applicable in some situations.
Please, take even the most basic efforts to understand what people are talking about here instead of forcing me to shove information down your throat like you haven't learned how to use an internet search yet. You don't need my help, and nothing I can say will be more convincing than your own personal research.
How about you cite something.
https://substack.perfectunion.us/p/dollar-stores-are-killing...
Source that they are replacing grocery stores? Dollar stores are closing and not expanding . 99 cents stores went bankrupt, rest have been closing hundreds of stores.
Also dollar stores carry produce just grocery at least largest ones do like dollar general. They are designed to compete against grocery stores and wallmart’s neighborhood markets.
There have been a few articles about this over the past couple of years, usually in reference to one study or another. Here's one that references a USDA study:
https://substack.perfectunion.us/p/dollar-stores-are-killing...
Did you know you can save even more buying B2B/wholesale?
Sometimes it is more about the upfront cost and/or resulting storage space needed, than pure price efficiency.
Spices might be the most universal ripoff anywhere in the US. You can get it so much cheaper either at ethnic stores, generic plastic bags at certain grocery stores in the ethnic aisles, or restaurant supply stores for spices that don’t have a short shelf life.
It’s so bizarre to me. At some point someone needs to do an in-depth expose on how this spice monopoly happened.
Spices are pretty much universally horribly overpriced at grocery stores.
time value of money
we don’t complain that the per unit cost at target is higher than at costco
Because it's very rare that Target crowds out the only Costco that sells produce in a 20 mile radius leaving only boxed shit food for people to buy.
People usually understand this, but realize driving 10 minutes to dollar tree for a few items is preferable to driving 30 minutes to cheaper shop
> The list price is low but the per-unit price is astronomical compared to grocery store prices.
The problem is, so is material cost and handling effort. Say, a 2 liter bottle of soda compared to 10x 200 mL. Same amount of soda, but more handling required for stocking, inventory management (aka, make sure there is no soda expiring on the shelf) and finally scanning it over the cash register, and more packaging material.
Larger units of anything will always be cheaper than small units.
Yup. Dollar General is worse than a convenience store like 7-11, it's an expensive inconvenience store.
And we need more local co-op grocery stores like Berkeley Bowl, the Davis Co-op, and ATX Wheatsville.
I have yet to visit a co-op that had cheaper than grocery store prices. Every single one focused on quality over cost savings.
This was not always the case. 30 years ago the customer base for bulk co-op places were lower-middle class/poor folks who had a decent amount of financial acumen. You'd go there with your own containers and buy staples by the pound. Or special order that 50lb bag of oats or flour for 1/4th the per-lb price of the local grocery store.
They slowly morphed into bougie health nut/conspiracy hippie stores during my lifetime. Closest thing I've found to what I remember them being are food service stores which tend to require a business tax ID to buy from.
While most comments will be negative toward Dollar General, in many areas Dollar General or Family Dollar or Dollar Tree are the only places you can get access and distribution to a wide range of products and brands in areas which are otherwise underserved.
You can dislike it, but they've evolved and expanded in part because they are very good at serving these areas profitably, where other businesses aren't.
People wanting bank branches and grocery stores and brunch spots here clearly have never lived or worked in many of these areas. The reality of theft, low spend, and employees - though not universal - is hard to fathom if you're not trying to 'run' the business. Good will does not pay your suppliers or rent.
I have overall had good experiences with Dollar General, but mis-pricing items like this is completely unacceptable. This article is very damaging to their brand to me. Even though I haven't experienced it myself.
Did you ever consider that they might have caused this situation?
It would help people to consider your point if you made even a modest attempt to explain and justify what you mean.
an interesting contrast that i think about a lot:
- in rural america, there are dollar stores everywhere that overcharge for small items. people treat them as a necessary evil and begrudgingly shop there.
- in nyc, there are corner bodegas everywhere that overcharge for small items. they are generally seen as beloved neighborhood institutions.
so... what's the difference? corporate owned vs family owned? length of time in community? presence of cute cat at the register?
This article is about something subtly different than overcharging: it's about consumers believing that they're paying one amount (the list/sticker price), and being charged a different amount (typically higher in the company's favor) at checkout.
In my experience, this doesn't really happen with bodegas: they might be overpriced in the "this is a bad deal for milk" sense, but they don't misrepresent their sticker prices to any degree that I've ever experienced.
(But also, I don't think bodegas do categorically overcharge in NYC. I think they're about the same as grocery stores, i.e. there's a large amount of internal variation in pricing because people generally don't want to make multiple bodega pit stops just to save $2.00 on eggs.)
Bodegas charge you a little bit more because a real human owner accepts the risk of serving a small community in exchange for being part of that community, and you pay that extra in order to make their existence possible.
Dollar Generals charge you a little bit more because a huge chain has driven out all the competition and you have no choice. The people who work there do not benefit from the extra you pay, and the owners are not members of the community.
There was no competition in many places dollar stores operate. They moved into those places specifically because they were underserved by larger retailers.
I agree, at least in my area.
Two neighboring dollar stores just went out of business in a town I commute through. The culprit? A new Harp's grocery store a block away.
The dollar store in my town is barely holding on - the competition? A Walmart across the street.
The only thing keeping it afloat is literally balloons I feel. Walmart doesn’t sell helium inflated ones.
Hey, Starbucks charges $3.50 for a cookie, I could buy 4 at the local bakery or two at the farmers market for that much (and get a better cookie).
>Hey, Starbucks charges $3.50 for a cookie
No, that's not what the article is about.
"Starbucks has a sign saying the cookie is $3.50. You are charged $5 at the counter".
That is the infraction here.
Because in NYC I pass by tens of the bodegas on the way to work and I can shop at any one of them. I can also shop at Aldi’s, Trader Joe’s, Costco, what have you.
You said it well yourself - “begrudgingly”. With so many options and price points, I don’t have to begrudgingly shop at bodegas. I do it happily if it serves my goal of getting a single can of Coke. If I want to get a whole stack of them, I’d happily get them at Costco. Options are great when you have them.
Probably „only store that’s in my vicinity“ in rural areas vs. „if that bodega sucks, I go to another“. So one is a necessity which overcharges, the other a convenience which overcharges.
Minimum wage in NY is $15.50, in Kansas it's $7.25. The overcharging in rural areas is not adjusted downward for lower wages. But I wouldn't shop at a bodega and don't find it virtuous there either.
In both cases they charge a little more because the next store charges a little more too.
Once upon a time I lived near the Prague city centre, and if the intent of such a corner shop is to rip off tourists and one-time visitors, the locals don't mind - at least as long as cheaper alternatives off the most notorious areas exist and are usable for them (Lidl etc.)
Quite to the contrary, the locals are sometimes happy to have such overcharged options at hand, for example if they are throwing a party and find out that they are short on vodka+cigs, and it is 1 am and all the regular shops are closed.
I believe Michigan has laws on the books that should be the model for this (the "Scanner law") - if you're overcharged at the register and the sale is completed, you have 30 days to get the price corrected plus ten times the amount of overcharge (between $1 and $5). Paying you the 'bonus' is optional, but if they don't do so you can file a suit for the greater of your actual damages or $250 (in small claims on your own or regular court which allows up to $300 in attorney fees).
An alternative would be to force stores with mischarge rates exceeding a specified level to close until they've completed a full audit of all shelf prices in the store but in some areas that could cause significant local hardship.
That is already ludicuously complex. Designed by Kafka so you give up.
They are attributing malice/greed to what is more likely just incompetence compounded by inflation. The employees most likely haven't updated the pricing on the shelves. If you have ever been in a DG or DT, you can see that the inventory is generally a mess and just put everywhere. There is one or two people up at the front. They don't have as many people stocking shelves as a grocery store to keep the inventory in order.
in 2025 I'm surprised you can't just scan everything on your phone yourself and get the up-to-date price. are there laws stating things must be a posted price? seems easier for everyone to have something you can scan that show you the latest price, or auto updating tags.
I experienced this first hand maybe a year ago when I randomly walked into a dollar general to get something, their prices often times are pretty close to the "regular" versions of the product, but packaged specifically for dollar stores.
I get why people shop at them in rural places because that's the only shop within 10-20 miles but in cities it makes no sense. Had prices been 20-30% cheaper but in a smaller size it would still be a ripoff but an understandable one, but often times I saw products that were priced just 3-5% below their standard counterparts while giving you maybe 30%-50% of the product.
Same. My city has a Walmart, Publix, Food Lion, Kroger, and Aldi. Yet they keep building dollar stores, I think there's now 5 within 10 miles of my house. They all seem to do decent traffic, which baffles me. The stores are a mess, items disheveled everywhere, and rare to see more than a single person working. Really depressing places, I cannot figure out their appeal.
People still think they’re getting. Deal. They’ll figure it out eventually. Same with goodwill selling clothes for at or above new prices, eventually the knowledge propagates.
The main thing keeping the local dollar stores alive is the death of Party City as far as I can tell.
Every store has some stuff that is overpriced compared to peers and some stuff that is underpriced. Dollar stores make their money more on drastic understaffing (leading to the issue in the article) and national scale than they do on being a consistently worse value. They have the cheapest freeze dried strawberries by weight you can get anywhere other than making them yourself.
Lots and lots of articles written about 23% of 300 items -- at one store? Every store?
What's the actual extent of the problem?
There have been way too many articles and videos at this point to keep pointing at the same small data set.
I've personally never experienced an overcharge, and at 1 in 5, it should have happened by now.
Is this a one store thing, or a regional thing, or should I just put those thoughts on hold and rage blindly?
> that would involve paying for a bus ride. “I don’t have money like that,”
inconvenience aside, are buses so expensive that you wouldn't save any money by going to a different store?
As someone who typically only enters a Whole Foods or a Home Depot for her retail experiences, the one time I entered a Dollar General, I was struck by how depressing it felt. I would never go back into one. Yes, I know how out of touch this sounds.
I think that's deliberate: you walk into a dollar store and think "they aren't spending a dime on the shopping experience, so they must be passing that dime onto me."
I have a very, very convenient Walmart including a pharmacy so I do go in from time to time especially for standardized purchases. But I don't really like it. And I poked my head into an adjacent Aldi once and retreated. Otherwise not really worth the headache.
I shop at Walmart and Costco. The customers at the Costco appear much better off, but they seem much more arrogant and inconsiderate. They leave carts in the middle of the aisle, talk on phones with their families blocking the way, and so forth. Same behavior in the parking lots. Maybe it's because Costco is always packed. The shoppers at the Walmart definitely look less well off. They are much more respectful and considerate of others. I like shopping at the Walmart more.
Have the fines pay out to customers that report and suddenly the issue is gone.
This happens at Walmart Canada all the time. The policy there is to slash 10$ off shelf price (or free for anything 10 or less).
Since COVID, Walmart has stopped having immediate fixes of the problem.
Since 2020, I have accumulated about $1200 in free merchandise using the above. Almost always food.
The disastrous Target Canada (iirc) was similar; obviously nobody cared at all.
Publix in the southeast US will give you anything that rings up wrong for free. I shopped there for 20+ years and only remember getting a handful of things free.
”Dollar General argued that when customers create accounts – for example, by downloading the company’s mobile app – they agree to use arbitration to resolve disputes and forfeit the right to file class-action suits. The judge agreed.”
Let me guess, the mobile app provides discounts…?
Dollar stores have on average a 2% profit margin, just like grocery stores. They are not the villains here.
This is like cheating in a golf match against a professional and then saying "I got the same score as my opponent, I am not the villain here".
Do you think large dollar stores are faking or cheating their profit margin numbers?
I mean, they are cheating customers on the item price, so it goes to show they'll do illegal stuff without care, so yea, why not.
how happy do you think the shareholders would be about that?
I don't think it is, so maybe you can help me draw the parallels.
Especially since it’s advantageous to adjust suppliers that you own to maintain tiny margins (who owns the land they rent, for example)
Subsidiary income would be included in a financial statement.
Not if the landlord is a side entity and not a subsidiary.
Their returns (margins are irrelevant) are usually lower than grocery stores. Large retailers will turn over their inventory tens of times a year, dollar stores won't so the returns are typically lower.
For some reason, left-wing journalists turn into law of one price zealots when confronted with this issue. The reality is that these locations have low-volume and stores everywhere are relatively expensive to run now. For some reason, journalists get angry at the company rather than people who control how much it costs stores to operate. I mean local governments in the US had no problem accepting Dollar General's sales tax from their poor constituents shrug probably more than the corporation is making from the store.
I live in the UK and there is a store like this, Co-Op. The Guardian finds it easier to blame evil foreign corporations because the Co-Op has much higher prices but is a non-profit so the narrative of the evil corporation crumbles.
You can find a poor me for almost any corporation to excuse their ripping people off.
What does their margin have to do with anything? Or, what things do you think they should and shouldn’t be able to do given their low margins?
Not charging the best-advertised price is dishonest. It might also be in customers' best interest if the cost of keeping consistent price data on low-margin items costs more than whatever the inconsistency is. Or the answer might be that dollar stores sell too wide of a variety too cheaply on too low-margin product to play supermarket-style pricing games effectively.
This comment section is full of allegations that dollar stores are predatory, yet when I look up their operating margins they are super low (4% for Dollar General, for example).
Yeah, queue the HN fake outrage about big companies and their C-Suite who are billionaires on the backs of the little people. So predictable.
Fact is, Dollar General and similar stores provide a real value to people who live in rural areas. Yes, their prices may be higher for some goods, but that is the price you pay for the convenience they provide. People are free to drive another 20mins to a WalMart or another store to save $0.50 for the same can of corn or loaf of bred. And, people who are really on a budget actually scrutinize the register receipts to make sure they are paying the price listed on the shelf. They can immediately bring up the discrepancy to the staff.
Just because your margins are low doesn't mean you still aren't screwing over poor people.
Wait, why? I get the emotional resonance of this, but unless their marketing spend is egregious I just don’t know how you can argue their whole business model is predatory.
It’s a bit like payday loans; they are a bad financial deal, but the alternative is no credit at all because the people who get them are high-risk borrowers and the costs associated with making and servicing a loan aren’t radically different for $500 or $50k.
Being poor is tough. But the low margins are a pretty good indicator that the alternative to shady businesses is simply not having businesses at all.
There is a difference.
ROI on payday loans for lenders is typically very high and their main issue is usually regulation that limits the volume they can transact. ROI on dollar stores is very low because the margin is low, costs are high, and inventory turns is relatively low. For example, Dollar General's inventory turns are half Walmart, that means that to continue operating they need to charge higher prices (the margin).
Low margins aren't an indicator of anything. They are a component of financial return in addition to capital. One does not make sense without the other. In high frequency trading, they are making 1/100000th of a percent on a trade, that is a very high return business if you can do this millions of times a day. Similarly, if I run a housebuilder then I need a 20% margin because I am going to be turning over my inventory across multiple years. If you take out industries with intellectual IP and the secular shift in margin due to taxation changes, ROI across industries is relatively stable...because margins don't matter. What is a good indicator of customers exploitation is if ROI is high. For dollar stores, shareholders are getting exploited, not customers (look at DG/DLTR share price, this is with a secular upturn in multiples, if you take out unit growth which is inherently limited the financial performance is non-existent).
Do any of you actually shop at Family Dollar? I do. They're cheaper on a lot of stuff. A box of Cinnamon Toast Crunch is $2 less than the same box at the grocery store in town. I bought a pair of shoes there for $4. They weren't stylish, but lasted longer than the last pair of Nikes I purchased.
Yeah, sometimes the sale price posted on the shelf is no longer applicable. Either the employees don't feel like they are paid enough to be vigilant or maybe they're too overworked to keep up. Whatever the case, you just learn to keep an eye on the checkout, or alternately ask for a price check on it before the cashier starts ringing merch. The second approach is more polite and the cashiers appreciate that.
The same thing commonly happens at the grocery store, and other stores I shop at too. It's not unique to Family Dollar or Dollar General. But I will note, at the Family Dollar, the cashiers will often say "This is on sale now, but it's not posted yet. That whole shelf is discount." And they will give me a better price than what I was expecting to pay. They have to manually adjust the price to give that discount to me a lot of times. Grocery cashiers just scan as quickly as they can and don't check.
So while all the yuppies who never step into dollar stores are acting hyperoffended about this story, I think the story is unfairly targeting the dollar stores. Apparently saving money gives some people here the "ick" but the employees there are only human. A lot of times, lower paid humans. Cut 'em some slack.
This is poor behavior by the stores. The solution will be conversion to eink shelf labels that sync like registers do. Realistically, the fines will not be increased to the point where increasing store staffing and training is cheaper. I don’t know where Dollar General is in this process, but many other c-stores and grocery stores have implemented digital labels. Digital labels come with the temptation to experiment with more dynamic pricing which would also make it harder to shop on a budget. However, high staffing or fines also increases prices. I wish we had better retail in more of the United States, especially needier areas.
I am convinced the wallmarts in Canada are doing dynamic with the eink price tags. I was in the same location twice in a week to pick up snacks for a gathering and the price of chips were 50% more on the Friday vs earlier in the week.
I believe they may in the US, too. Anecdotally, I bought all of the Dr Thunder Zero Sugar at one store twice, and they bumped it about 20% for a few weeks after that. They didn’t change the other generic sodas’ prices.
Seems shortsighted for a retail business since people will only need to get burned once or twice to stop showing up.
They already (at least Target and Walmart) do the “cheaper online than in store”) - if you catch it they’ll price match themselves but who is checking all prices every time?
For people to vote with their wallet, there has to be an alternative. In "dead" markets where there is only one realistic alternative, whoever holds the monopoly can do whatever the fuck he wants, captive audience.
And no, it's not possible to compete as a startup against Walmart or any other of the corporate giants (and not just in retail, it's valid across industries) - alone because the sheer scale of Walmart allows them to extort insanely cheap pricing out of vendors. Walmart can sell for far cheaper than any mom and pop store can acquire.
Huh, with eInk prices, how do customers prove "Wait, the price on the shelf was different!", the store can just change the price as they go to double-check. As a customer you can take a picture of the price, but then it'll be an argument of "This picture is old/doctored/AI".
Of course the chances of this sort of scam happening are probably not that high, but hey, considering the country is rotting more and more, from the top...
Snap a pic I guess, there are many ways to game this either way, but if people start catching stores do this then it could lead to issues for the store.
Could it? A gas station doesn't get in trouble if I show up with a photo of yesterday's posted price
>Huh, with eInk prices, how do customers prove "Wait, the price on the shelf was different!", the store can just change the price as they go to double-check.
Even with paper tags, the store can't get someone to change the price while you're waiting at the cashier for a "manager" to show up?
This is what discovery is for. Changing e-ink tags has an audit trail associated with it.
“In one court case in Ohio, Dollar General’s lawyers argued that “it is virtually impossible for a retailer to match shelf pricing and scanned pricing 100% of the time for all items. Perfection in this regard is neither plausible nor expected under the law.””
Sorry—-what? Isn’t that one of the fundamental basic jobs to be done and expectations of a retailer? You put physical things on display for sale, you mark prices on them, and you sell them. When the prices change, you send one of your employees to the appropriate shelves and you change the tag.
When on earth did we get into a world where that absolutely fundamental most basic task is now too burdensome to do with accuracy?
An easy test for this is how often the price at the register is higher vs lower than the marked price. If it's close to 50%, then ok, it's a mistake. But if it's higher...
I don't think you would reasonably expect it to be close to 50/50. Most price changes are increases and the mistake theory basically boils down to the employees never updating the shelf tags. Which I think is an extremely plausible theory since the one employee at the store isn't paid enough to bother. And who's even going to check that they updated the tags? Dollar General isn't shelling out money for that.
There's another kind of store that's in a similar situation: thrift stores and nearly all of them have also decided this problem is too hard. Lots of items are marked with just colors based roughly around their estimated value and the store changes the price/color mapping occasionally.
I used to work at Best Buy replacing pricing stickers before the store opened. We had a sheet of new stickers for changed prices every time and had to scan every sticker in the store to make sure they were all up to date.
It makes sense they’re all switching to e-ink tags though, probably saves a ton in labor and the occasional mistake.
That's because those stickers constitute an offer of sale for a given price. If a customer comes in, takes the item, throws down the cash to an employee and leaves, that's a 100% bone fide legal sale.
That's also why messing with price stickers is a crime.
It’s virtually impossible for them because they’re not considering hiring more people to do it.
Dollar General stores often run with one overworked staff member doing everything in the store, from stocking to working the register (which is why the register is unstaffed so much and you have roam the store to find someone to ring you up…)
“Because of conditions of our own making, it is virtually impossible to comply with the law, thus we shouldn’t be held accountable to it.”
It’s the same BS when Meta and others say they can’t moderate posts because there’s too many.
Just make the sticker price legally binding and this issue would be solved with almost perfect precision.
The sticker price is legally binding - it constitutes an offer, and the cash register surreptitiously charging a higher price from what the customer has agreed to constitutes fraud. The problem is that asserting your rights takes time, resources, and energy that people shopping at these stores generally do not have. The people that would have the ability to push back instead just use their resources to move on and shop somewhere else that isn't immediately abusing them.
"The people that would have the ability to push back"...
And they can. Just bring it up to the cashier or managers attention, and voila, they adjust the price. Please let me know if you have had a different experience.
There's no "just". It takes resources to be scanning your receipt for discrepancies and/or running your own tally. And there are a few examples in the article referencing stores refusing to adjust prices, or of people noticing on their receipt that they were defrauded and the store refusing to reimburse them.
Resources to read the receipt? Are you saying poor people can't do math? Honestly, how much effort does it take to look at your receipt and look for errors? If you are really on a tight budget, I guarantee you will be looking over your receipt.
I have watched countless people shop with a calculator or pen/pad to make sure they stay on budget. It is not hard.
The hard part is talking to the cashier and waiting for a manager, potentially having to argue with both, and looking like a cheapskate.
If you've ever shopped at dollar stores they are often understaffed with a long line, no self-checkout, and a single cashier on duty if at all. If you argue about pricing you will hold everyone up in line, maybe get dirty looks and possibly wait an hour for someone with the authority to come and clear it up. Another person in this thread also mentioned that they got screamed at and chased out of the store for "causing a problem": https://news.ycombinator.com/item?id=46182451
I have been to the Dollar Store (and similar) many times and have never witnessed anyone getting yelled at for saying, "Hey, I think this was a mistake. Can you correct it, please?" (or any other place I shop - especially the grocery stores). We tend to have very positive experiences when pointing out pricing errors. My mother-in-law made it a point to review the receipts ever time we went to the grocery store. No big deal. As other have said, sometimes you get +10% of your money back and other times you get it for free.
Yes, mistakes happen; yes, people get over charged. But to imply people are shamed for asking to correct the error just seems...odd.
I mean, that person actually got yelled at and had to leave the store. Some are more sensitive than others and just the fear of an unpleasant interaction is enough for some people. I've let small discrepancies slide just because the staff looked overworked and I didn't want to make them stop what they're doing, run down to the aisle and check prices and get their supervisor. For most I think it's just a time thing. It isn't worth a couple dollars to commit to an unpredictable amount of time going back and forth and waiting for a manager. I salute those lions like your MIL who stand their ground and fight back but there are also many, maybe most, who are just in a hurry or want to avoid confrontation.
Thanks, I appreciate your perspective.
One note about asking for a refund/price adjustment. Occasionally the store workers forget to pull the sale prices off the shelf when the sale is over. In these situations, the manager/workers are appreciative since they can pull the sticker that was left on by accident. Just my experience...
[delayed]
> The sticker price is legally binding, as it constitutes an offer
While I wish that that were how things worked, unfortunately, the US legal system disagrees [0].
[0]: https://en.wikipedia.org/wiki/Invitation_to_treat#Case_law
That’s about ads, not sticker price on the shelf, and about a lack of obligation to sell at that price. It does not say that it’s alright to lie and charge a different price at the register.
From the Wikipedia article:
> A display of goods for sale in a shop window or within a shop is an invitation to treat, as in the Boots case, a leading case concerning supermarkets. The shop owner is thus not obliged to sell the goods, even if signage such as "special offer" accompanies the display. […] If a shop mistakenly displays an item for sale at a very low price it is not obliged to sell it for that amount.
Boots was a UK court case. The Wikipedia article you linked has a note at the top that it mainly refers to British law.
In the US, local laws generally side with the consumer and legally entitle you to the displayed price. There are also federal laws from the FTC act against deceptive pricing.
See some US state laws here: https://www.nist.gov/pml/owm/us-retail-pricing-laws-and-regu...
a few summaries from https://www.braincorp.com/resources/the-price-must-be-right-...:
>Michigan requires a bonus of 10 times the overcharge amount.
New Jersey’s Retail Pricing Laws mandate that most retail stores clearly mark the total selling price on most items offered for sale. Retailers must also verify the accuracy of their checkout scanners and may face fines of $50-$100 per violation for noncompliance.
Connecticut law requires stores to charge the lowest of the advertised, posted, or labeled price for an item. Customers who are overcharged are entitled to a refund of the overcharge or $20, whichever is greater
> When on earth did we get into a world where that absolutely fundamental most basic task is now too burdensome to do with accuracy?
It always has been this way since barcoded stock keeping units because of the problems identified by CAP Theorem [0]. Since the price data of an object must exist in two locations, shelf and checkout, the data is partitioned. It is also relatively expensive to update the shelf price since it depends on physical changes made by an unreliable human. Even if all stores used electronic price tags there will a very small lag, or a period in which prices are unavailable (or a period of unavailability like an overnight closure).
It would be interesting to understand at what point of shelf/checkout accuracy would lead to what increases in overall prices [1]. That is to say that pricing information has a cost: a buyer must bring the item to checkout to find out the true cost in the case of authoritative checkout, or the clerk must walk to each shelf in the case of authoritative shelf.
Once upon a time, each item in the store was labeled with a price tag and the clerk typed that tag into a tabulation device in order to calculate tax and total. The advent of the bar code lead to shelf label pricing since the clerk needn't read a price from each item, leading to the CAP Theory problem of today.
I suppose that the future will bring back something similar to individual price tags in the form of individual RFID pricing. This way each individual item on a shelf can be priced in a way that is readable by the buyer and the seller in the same manner.
0. https://en.wikipedia.org/wiki/CAP_theorem
1. https://en.wikipedia.org/wiki/Pareto_efficiency
Dollar General: "people these days just don't want to work (meaning, my clients don't want to do that work or pay lazy genZers...)!"
One simple solution here (and for all sorts of legislated fines and thresholds) would be to tie them to inflation; it looks like the fine of $5,000 dates to the early 90s.
> North Carolina law caps penalties at $5,000 per inspection, offering retailers little incentive to fix the problem. “Sometimes it is cheaper to pay the fines,” said Chad Parker, who runs the agency’s weights-and-measures program.
Well, there’s your problem.
I had a clerk flip out on me a while back at a Dollar Tree because I wanted a charge for a dollar -- it rang up as 1.25. They rolled their eyes and told me not everything is a dollar, and I maintained that absent pricing stickers indicating otherwise, the default is a dollar. When I pointed out another way to look at it is it's a twenty five percent price discrepancy, someone came out of an office and literally screamed at me and chased me out of the store for "causing a problem", telling me that if I'm going to cause problems, so will she.
I wasn't cursing or yelling, just calmly making the points I made above as the employees took a dive bar approach to customer service...
It doesn't surprise me at all that this kind of thing is intentional -- they're banking on you not walking out without the item having carried it to the checkout.
"the default is a dollar"
There is no default price.
It's called "dollar tree" for a reason, historically prices were and are a dollar unless otherwise noted.
They went up to $1.25 in '21 I think. It was extensively cover by the press.
>They went up to $1.25 in '21 I think. It was extensively cover by the press.
I'd love to see a citation on that, since I think you're mistaken -- there's plenty of things that are still a dollar, mostly stuff like packages of napkins or plastic cups, cards and other sundries.
(What was extensively covered was that they were no longer a "everything is a dollar" store.)
Citations:
https://www.usatoday.com/story/grocery/shopping/2025/12/04/d...
https://www.businessinsider.com/dollar-tree-raises-some-pric...
https://www.the-sun.com/money/14719523/dollar-tree-sneaky-co...
I can't cite details, but I believe that case law has settled this many times.. When a customer enters a commercial business, there are implied contracts that are enforceable.. I am thinking of restaurants first. I believe it is the responsibility of the goods and services provider to show prices accurately and honor them, and variations of that are well-understood in court. These kind of transactions are common for thousands of years in the West.
At a certain point we have to acknowledge that a huge share of our economy is just raw predation.
We might also acknowledge that a pretty significant share of people do know that already and just shrug their shoulders to it, convinced that it's better to allow for that than do anything about it.
There's been a lot of work put into distilling "free market" into its most radical interpretation, and lots of people just aren't open to bringing much nuance or pragmatism to bear upon it any more. Many lessons learned painfully in late 19th and early 20th century have been forgotten and the counterweight and containment policies that they earned now tend to get ignored or dismantled.
And somehow instead of trying to make it better, there are never ending attempts to make it even worse somehow ( if some of the patents are to believed ). I honestly sometimes wonder if some of the stuff is not in place already only because public reaction if all those were plopped in place in one go.
Well, why don't the ethical non-predators open up shops in economically disadvantaged areas and offer non-predatory prices? The margins must be huge if they really are predators.
Good question, was on my mind too. The problem I could see is Walmart style - the predator will beat the prices of the non-predator down until the non-predator goes out of business, then raise their prices again.
They can do this because they are operating in other areas with predatory prices, giving them the ability to operate at a loss, and relying on the fact that at least some of those areas are not being challenged by non-predators.
Everybody seems to be playing the game right in this scenario. Interesting to try to come up with a good counter.
Does this actually happen? If a community opened up a co-op shop that started eating into the revenue of a dollar store, would the dollar store company try to fight back, or would they just exit that market?
Yes, I guess well capitalize companies could offer unrealistically low prices, but on the other hand, any kind of co-op or community driven organization has the benefit of not needing the margins. Dollar store investors are there to make a buck, if their capital isn't getting reasonable returns will ultimately exit the business and move somewhere else.
Cooperatives do not get rid of the net negative cycle. Ultimately whatever the benevolent entity ends up being, it becomes a contest of who can bear to lose more money.
Cooperatives distribute the losses but it is still a money pit.
The loot is already spoken for by complements and embedded in real estate prices, stock prices, etc.
Hobbes arguments can rationalize any Nash Equilibrium.
Isn't it just the predators that care about stock price to enrich themselves? Couldn't a co-op exist which offered non-predatory pricing and didn't try to maximize their stock price constantly? And real estate in destitute rural areas is generally dirt cheap.
Of course this could be offered. But, no one wants to do it because it's a thankless job. And if you're going to do a thankless job, you'd probably rather get paid a lot of money to do it than very little
You're ducking the argument. The loot from predatory practices is quickly absorbed not just by the single player perpetuating them, but by their complements in the economic network -- complements which a competitor would have to deal with on the loot-enriched terms, which turn launders exploitation into a "necessity" and transforms any charity into a weakness that will ensure your replacement. That's what Nash Equilibrium is, and it's an elementary result of game theory that Nash Equilibrium can lie very far from the global optimum. Even the global minimum can be a Nash Equilibrium. We should aspire to do better.
Always has been.
It really wasn't this bad in the past on a whole. There were plenty of bad actors, but EVERY actor wasn't bad.
Just look at food recipes American corporations feed to Americans, and their different recipes for Europe that look more like the American recipes circa the 1990s. Everything in America is optimised to the max permissible bad action.
There is one overriding difference between US culture and European culture (and to a fading extent, British culture).
In the EU and UK, shame still motivates better behaviour.
Every single problem the USA has comes down to the fact that shame, in the USA, stopped functioning in the late 1970s.
Yeah. Why do I have to pay a plumber to install gas appliances? It's just a protectionist racket.
Point is, it's easy to screech "predation" or whatever but the problem is that every one of these things has some justification that can be used in the abstract.
It does legitimately cost more to run a store like Dollar General than Walmart so the same can of beans has to cost more on their shelf for the same margin.
How much more, how much is justified? I don't know.
A justification for lying to poor people about the prices of things they're trying to buy? Do tell.
I know we're all idiots here because that's what easy tech money does to people but retail margins are razor thin. You can't just make thoughtless trite statements about what they "should" do because a few percent here and there is the difference between red and black and red means prices go up. I'm sure they're happy to not invest in accuracy when it makes them money but there's a pretty wide gulf between being sloppy because it suits you and actively making a business out of deceit.
Happened to me yesterday. Haagendaz ice cream. $4 on the shelf, $5 at the register.
If it says $4 on the shelf and you pay $4 at the register and walk out with the goods, that's a 100% legal sale and not theft. Not even if it was a mistake on the part of some employee (and it's not the employee's fault either, by the way)
The store is under no legal obligation to sell it to you, just like you're not obligated to buy it for that price. Depending on the situation, that might be false advertising they could get in trouble for, and obviously you're not committing a crime if you don't know the real price, but if someone says "oops, that's a mistake", and you take it anyway and give less money, that is theft in most states.
>If it says $4 on the shelf and you pay $4 at the register and walk out with the goods, that's a 100% legal sale and not theft.
Source? What happens if somebody stuck a $1 sticker on a ps5? Does that mean you can walk out paying $1 for it, even if the cashier corrects you? What if it's not something absurd but a plausible good deal, like $50 off?
It literally is the employee's fault but they are not legally liable for it.
An employee is generally only liable if they purposefully sabotage their employer's business. So a mistake doesn't cut it.
And that's effectively an impossibly high bar in the typical mundane cases though.
I wish I could be surprised and I can see this happening in many places. This type of 'fraud' was predicted when we allowed the stores to stop marking items with the price.
Many places were I shop, hardly any products are lined up with the price attached to the shelves, plus the descriptions of some items are confusing due to the multiple names for the same thing.
Time to force stores to mark each item with the price once again.
Dollarama Inc. stock price is up 273% in the last 5 years.
Dollar stores are the new neighborhood "outlet stores" compared to outlet stores of yesteryear (remote locations for not much/any savings). They're actually glorified convenience stores while also not being proper substitutes for grocery stores in food deserts. Most US grocery stores are also now rip-offs like convenience stores were, while big box stores are somewhat savings stores now... f'kin' turbo inflation.
I don't know about the feasibility of government grocery stores, but I'm pretty sure the entire food supply chain would benefit from massively changing to the employee-/customer-/supplier-owned co-op model and get megacorps and private equity out of the normalized deviancy of predatory money extraction for essential goods and services.
"The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. ... A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. ... But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet."
"This was the Captain Samuel Vimes 'Boots' theory of socio-economic unfairness."
- Terry Pratchett, Men at Arms
——
Dollar stores, even when they're actually giving you low prices (and not just charging $1 for 1 of something that you could get a 3-pack of for $2 elsewhere), are often selling lower-quality versions of the products they sell—sometimes versions specifically made for them, but without any visible difference in packaging.
Yes, being poor is expensive and people just don't seem to grok that
Take energy. I'm not rich but I'm comfortable, my energy is paid for in an efficient way, I can shop around easily for the best rates for my lifestyle and so on. But if I had no money they'll fit a pay-per-use meter, they charge more money to fill that meter, if I can't fill it or forget to then the power goes out - and it's inconvenient to use it.
Years ago now I had a dispute with the water utility. I refused to pay, so, they eventually concluded that fixing their error was too difficult so they just created a new account starting from zero and wrote off all the costs for the disputed period entirely. If I'd been poor, they'd have threatened to cut off the supply (they're only threatening, fortunately it's not actually legal here to cease supplying clean water to poor people like they're not even animals) and sent scary people to demand payment.
> are often selling lower-quality versions of the products they sell
Clothes brands do this too.
Clothes at the outlet store aren't the same as clothes at Dillards, what's stocked at a struggling Macy's in a relatively poor area may be different from what's available for the same brand at Macy's in Manhattan, and all that may not be the same as what's in their flagship stores.
Sometimes they make it semi-obvious provided you learn their secret label language (Polo by Ralph Lauren, Chaps by Ralph Lauren, Ralph Lauren Purple Label, and about a half-dozen other major variants, for example). They do this so they can sell shit to unsophisticated consumers at a large mark-up for the name, riding on the reputation and clout of the good versions of what they sell (elsewhere, at even higher prices).
Cash strapped, but also presumably more likely than the general population to be innumerate or have dyscalculia or dyslexia.
It's the same bullshit that allows discount prices on Black Friday or during January sales to be completely misleading.
In the UK we are much tougher on this kind of manipulative pricing, but you still find manipulative things, like being unable to find the price-per-100g on discounted items and "clubcard" items, or bulk buys that end up having higher unit costs and yet seem not to be errors.
what's the point of this hit piece? isnt that frying pan with a sticker price of $10 and rung up at $12 still $50 anywhere else?
I don’t think this is true. Even if pricing in the shelves is accurate, in my experience Dollar General is typically a little more expensive than a normal mid-range supermarket (or e.g. Amazon) for most things.
Could work like this:
1. You help your friend wash the dishes and notice their hefty, 5-quart stainless steel pot. You look it up on Amazon and it's like $50.
2. At $store, you see something that looks like that size and style of pot, but for only $10. What a steal! It's even ultralight so it should be easier to load in the dishwasher...
*Several months later*
3. Your pot is all warped to hell, making it difficult to cook evenly. But your friend's pot is probably fine for the next few decades if not longer. (Note: if this were an oven pan the warping would make it dangerous to use.)
4. To add insult to injury, $store got two more of your dollars just because.
I picked the 5-quart pot because I've seen one of these with my own eyes.
In any case, OP would have been better off paying me $38 for nothing but crushing their dream of buying a decent quality $10 frying pan.
then why do poor people shop there? is the idea dollar general is strategically misleading them to see prices advertised lower than a normal supermarket but in fact they are higher? i didn't think the article was making that strong of a claim at all. it seemed more like, operations are minimal and staffing short (which in theory enables lower prices) and they linked the staffing issue with simply just not being on top of updating price changes on the shelves
> then why do poor people shop there?
While the typical viewpoint is that "poor people" shop there, that's actually somewhat of a misnomer.
Most dollar stores in the US are located in rural locations, and in part because a lot of rural population is also "lower income" they get the appearance of "only the poor shop there". But the part the folks who label the stores as "for the poor" often overlook is the "ruralness" aspect. That dollar store might only be a five to ten minute drive away to grab something, meanwhile the Walmart or Target or other, that likely has the better deal (the 128oz of Tide for 9.99 vs the 8oz of Tide for $1.50) is a forty-five minute drive away one way. So couple 1.5 hours round trip commute, plus fuel costs for that 1.5 hours, and you start to see why folks would more likely shop at the dollar store vs. the store that actually gives them the better deal overall.
That's partly the "magic" of the dollar stores for corporate. They sprout up like weeds in rural areas much like Starbucks sprout up on every corner in cities. And they capture sales largely because by sprouting up like weeds, they are a shorter round-trip drive to grab sometime (esp. to grab those one or two things you forgot last weekend when you /did/ make the 1.5 hour round trip drive to go to the nearest Walmart for the better deals). These store's sales largely come from the 7-11/Starbucks method in the city: convenience.
And couple the above with the fact that in rural USA, there is effectively zero public transportation and very little in the form of uber/cab companies, and so if one does not have a car, one may be stuck shopping at the dollar store 5-10 minutes away even if one knows the stores are gouging.
1) Misleading advertising? Yes. Obviously this is true if you accept both that their prices are generally higher, and that they’re advertising low prices.
2) They’re in more convenient locations - often on the drive home already - and are smaller so are faster to get in and out of when you’re hurrying to or from work.
3) If you’re _not_ working, they’re probably cheaper to _get to_, especially if you can’t drive, because they’re closer.
I’m not as up in arms about this as some - in some respects this is just a new iteration of the corner store or bodega, which have always been a little more expensive than supermarkets (and often a little disorganized…) - but it is the truth.
Dollar General and Family Dollar are smaller stores that are generally the only option within a reasonable travel distance. Here in the South, you might be able to catch a bus to Wal-Mart, but it’ll take 2-3X more time (1 hour instead of 20 minutes), so people go with the closer option even thought it is more expensive. No guarantees that Wal-Mart will be cheaper either.
In Chicago they closed the Wal-marts leaving only the Dollar Generals and Dollar Trees as the only walkable stores.
Is it a hit piece if it’s true lol?
Listen, I know we all love to circle jerk about how dollar stores are evil, but you can walk into just about any regional chain supermarket and replicate the same exercise and get about the same results.
What a rude, dismissive comment about a very real issue affecting real people.
Sorry, real people who are on a real (strict) budget pay attention to the price of goods when they shop. If you are really hurting from a $3 overcharge, chances are you pay very close attention to the register receipt and bring it to the store's attention. Regardless of income, my wife and I routinely scrutinize the register receipt. Force of habit.
Can you? I think the implicit counterclaim in TFA is that other supermarkets/stores don't fail state pricing inspections nearly as often. If you have evidence/articles showing that TFA has cherry-picked dollar stores for criticism, that would be helpful to share.
I've got one local grocery store where the meat prices are sometimes off and another where it's the bakery. The fact that it seems to be confined to certain departments makes think it has a lot to do with the quantity and quality of labor being applied. And dollar stores being dollar stores they apply the cheapest and they apply it sparingly. Not that that excuses it but it at least explains it.
> listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50
I'm sure the US obsession with not putting the actual price (tax included) on the shelf helps a lot with this. I would notice quite quickly if a store would systematically overcharge me in Europe. It'd be much harder in the US where I expect the price on the shelf to not match the price at checkout.
Those prices aren't because of tax; even the highest sales tax wouldn't cause $10.99 paper towels to ring up as $15.50.
Yes, but the US consumers are conditioned to see one price and pay a higher price. You and I might see +40% and think "that's too high a percentage". Others see +something and think "just like every other time". If they even look - I'm sure these items are often in a cart with many other items.
The stores get away with it because even when ignoring the fact that tax is added after, few of the shoppers in these stores will remember the shelf price for a basket of 20+ items from the store. They might remember one or two, but they won't remember (and therefore will not notice) enough of the shelf prices to notice the systematic overcharge at the register. In reality, a good number of the shoppers likely don't remember any of the prices from the shelf tags, and will not be mentally summing up what the final price should be, so those shoppers won't notice the discrepancy at all.
> stores get away with it because even when ignoring the fact that tax is added after, few of the shoppers in these stores will remember the shelf price for a basket of 20+ items from the store
We don't bother remembering it because we're in a high-enough trust society where that burden shouldn't be necessary.
I'm pretty sure the problem is "companies try to screw over poor people", and not "the sticker price doesn't include the tax".