Dollarama has reached a proposed national $2.5 million settlement in Quebec Superior Court in a class-action lawsuit that alleged the company advertised incorrect prices for certain products.
The plaintiff in the suit — Montreal firm LPC Avocats — claimed the company displayed incorrect prices for products that were subject to an “Environmental Handling Fee (EHF),” including batteries, electronic products, light bulbs and toys with batteries.
Customers would have been charged an amount higher than what was advertised on shelves, the suit alleged.
Joey Zukran, founding attorney at LPC Avocats told Global News the lawsuit was launched about a year ago because the company was making a technical violation of Quebec’s Consumer Protection Act.
“There’s a very hard-line rule that says that the merchant has to advertise the exact price that the consumer must pay, prominently and completely, so not fragmented, excluding certain taxes,” he said. “The technical part of this case is that the eco fee, although is part of some government mandate, is not a tax.”
He said as an example, someone wanting to purchase a pack of batteries may find it advertised as $1.25 in “big, bold letters” and on the package itself, but then an added $0.12 would be printed in small font that a person may not notice.
“It’s a technical violation, but nonetheless a violation in our view,” Zukran said.
People who purchased a product that was subject to an EHF from a Dollarama store could be eligible to receive up to a $15 gift card, though the settlement notes the eligible purchase depends on the timing and location.
Customers in Quebec who made a purchase between Dec. 11, 2019 and July 4, 2023 can sign up for the settlement by providing their email address here by April 5, while people in any other part of Canada must have made the purchase between May 29, 2021 and July 4, 2023.
The gift card can be redeemed at any store and will not expire, the notice of settlement says, and can also be loaded into the store app on customer phones as well. It adds the value could be reduced, however, depending on how many make a claim.
A hearing on whether to approve the proposed settlement will be held April 9.
In a statement to Global News, Dollarama defended its charging of eco fees while acknowledging the settlement.
“Just like all other retailers, Dollarama charges for eco fees where appropriate, but given our fixed product price points, we displayed our retail price and eco fee separately,” the company wrote. “Dollarama and class counsel have agreed to settle the claim related to our price display practices for applicable products where eco fees need to be collected.”
Zukran said while the company settled the case without prejudice or admission, he added that the company also modified its business practice within weeks of the suit and the full price is now “fully explained” in stores across Canada.
He also noted he would not say Dollarama’s actions were “sneaky” nor would he use the word “mistake” either, saying the separation of retail and eco fee was more likely a business decision.
What is an eco fee?
The eco fee at the heart of this lawsuit and settlement differs in how it is collected by province and territory. But it is commonly considered to be a fee used to recover costs related to recycling the various products, according to the Resource Productivity and Recovery Authority in Ontario.
The Recycling Council of British Columbia also notes the EHF or eco fee helps with recycling programs, including depot operation, public education, and the shipping and storage of collected electronics.
“The money wasn’t being kept in their coffers, it was actually a conduit and being transferred to the government authorities or to the environmental authorities in charge of these government programs,” Zukran said. “At the end of the day, the price should have been fully disclosed.”
While the lawsuit was filed in Quebec, the lawyer added that Canadians across the country are eligible because the case was initiated and settled on a national level, which he said allows the company to “resolve all pending claims against it.”