Dollarama reaches $2.5M settlement in class-action suit over pricing

Dollarama customers who purchased products subject to an eco fee — such as batteries, electronics, light bulbs or toys with batteries — may be eligible to claim a gift card.

The Montreal law firm of LPC Avocats Inc., announced Tuesday that the proposed national settlement has been reached in a class-action lawsuit about prices advertised and charged by Dollarama for products subject to an Environmental Handling Fee (EHF). It's subject to court approval in April. 

The plaintiff in the lawsuit alleged that the Montreal-based retailer did not properly display the price of products subject to EHF and charged a total price or EHF higher than displayed or allowed by law.

Richard Powers, an associate professor at the University of Toronto's Rotman School of Management, said the settlement is a "drop in the bucket" for a company like Dollarama.

"I'm not sure how strong a case the plaintiffs had, but [Dollarama] clearly wanted to get rid of it just because of the reputational damage that can go along with that," he said.

Under Quebec and consumer protection legislation, merchants have to display the full price of a product — rather than a fragmented price — so that consumers know exactly how much they're paying as they approach the cash, according to Joey Zukran, a lawyer at LPC Avocats and the class action counsel.

"Just a couple of days after the lawsuit was filed, Dollarama immediately modified its practice nationwide," Zukran told CBC News.

Dollarama denies any liability or wrongdoing. A hearing on April 9, 2024 will decide whether to approve the settlement before any compensation is provided to class members.

Anyone who purchased a product subject to an EHF from Dollarama in Quebec between Dec. 11, 2019, and July 4, 2023, or elsewhere in Canada between May 29, 2021, to July 4, 2023, could obtain a gift card with a maximum value of $15.00.

If a high volume of customers take up the settlement, it could reduce the gift card amount per person — though some of the claims could be as little as eight cents, Zukran said.

The class action also includes Shoppers Drug Mart and its Quebec counterpart Pharmaprix, which have not filed a settlement.

To claim a gift card, eligible customers must provide their email address by April 5, 2024. LPC Avocats says no proof of purchase is required.