The agreement resolves a lawsuit brought by Illinois, the Federal Trade Commission and 16 other states, which alleged the discount chain routinely rang up customers at prices higher than those posted on shelves, price tags and advertisements.

Under the settlement, Family Dollar must create a $40 million fund to compensate eligible consumers and a separate $20 million discount program for shoppers. Illinois will receive $188,548 as its share of the deal.

"Family Dollar overcharging for products at a time when many basic necessities have become less affordable harms vulnerable families and communities," Raoul said in a statement. "I am pleased with this settlement that holds Family Dollar accountable and takes steps to ensure that it will not overcharge consumers in the future."

The complaint alleged that thousands of Family Dollar locations charged customers more than the advertised price and that the company failed to fix the problem despite repeated failed inspections and a steady stream of customer complaints.

Beyond the money, the chain must launch a pricing accuracy program that regularly monitors and verifies prices, trains employees to spot discrepancies and corrects errors so that shoppers are charged the prices displayed or advertised. The program will be independently assessed and certified every year.

Family Dollar is also required to post notices about the redress fund at every store and on its digital platforms, Raoul's office said.

The settlement lands as household budgets remain stretched by elevated grocery and household-goods prices, and it targets a retailer that serves many lower-income neighborhoods where residents have fewer shopping options. Consumer advocates have long argued that pricing errors at the register fall hardest on families who can least afford to absorb them.

Family Dollar did not immediately respond to a request for comment.