Dollarama Reaches $2.5M Settlement in Class-Action Lawsuit

People walk into a Dollarama store in Toronto, September 25, 2021. The Canadian Press/Graeme Roy

Quebec-based Dollarama has agreed to a $2.5 million settlement in a class-action lawsuit that will see eligible customers receive a $15 digital gift card.

The lawsuit relates to an environment handling fee (EHF) that the plaintiffs said was included in the price of certain products without customers’ knowledge. EHFs were charged for items like batteries, lightbulbs, and toys with batteries, but were not included in the advertised price of the item, a Quebec plaintiff said when initiating the lawsuit.

“The plaintiff essentially alleged, among other things, that Dollarama did not properly advertise (display) the price of products subject to EHFs it offered for sale and that it charged a total price or EHFs higher than displayed for these products or allowed by law,” said a statement by the plaintiff’s lawyers, LPC Avocats.

LPC lawyer Joey Zukran told The Epoch Times the settlement was a “really, really good result.”

Mr. Zukran described the store’s prior practice of not displaying the full price as a “technical” violation of Quebec and Canadian law. 

“I think Dollarama did the right thing as a corporate citizen, immediately fixing the practice and correcting the issue and...by putting a pot of money in a fund to be able to compensate their customers,” he said.

The settlement covers anyone who purchased an item with EHF fees in Quebec between Dec. 11, 2019, and July 4, 2023.

The settlement also applies to anyone else in Canada who purchased an item at Dollarama that is subject to EHF fees between April 29, 2021, and July 4, 2023, the announcement said.

Dollarama will offer a $15 digital gift card to anyone eligible for the settlement. The cards will not expire and can be used in “multiple transactions,” the company said. Those wanting to submit a claim can enter their email address at https://reglementecofraisdollarama.com/en/ by April 5.

No compensation will be paid out until the settlement is approved by the court. A hearing has been scheduled for April 9.

The news comes after the company reported a 14.6 percent growth in sales to $1.47 million from the previous year.

“Sustained consumer demand for our broad range of affordable everyday products and strong execution in the third quarter of Fiscal 2024 drove double-digit same store sales growth for a sixth consecutive quarter,” CEO and president Neil Rossy said.

He noted the increase in sales had led to more than 31 percent earnings per share growth.

“Our financial and operational performance year-to-date reflects the strength and relevance of our value proposition and business model in a challenging macro-economic context,” he said.

The company said that store sales saw more than 11 percent growth and 16 new stores were opened.

Dollarama has previously announced it intends to open 60 to 70 new stores in 2024. It also anticipates a five to six percent growth in store sales.

The company has seen sales consistently rise over the past couple of years as Canadians look for cost savings in the face of rising prices and inflation.

The company announced annual sales at $5.05 billion in January 2023, a two-fold increase from 2015, according to Statista.

“Dollarama is evidently by far the biggest and most frequently visited dollar store in Canada and is followed by Dollar Tree,” Statista said. “Dollarama and Dollar Tree are also listed among the leading discount stores worldwide.”