The Michigan Attorney General’s office, led by Dana Nessel, issued a notice of intended action against Five Below, Inc. for repeatedly overcharging customers and failing to provide clear pricing at nearly 20 stores in the state. The notice cites violations of the Michigan Consumer Protection Act and the Michigan Shopping Reform and Modernization Act, which require that the price scanned at the register match the price displayed on the product or shelf.
Between August 3 and November 5, 2025, more than 18 instances were documented in which items labeled $5 were charged $6 or $7. The Michigan Department of Agriculture and Rural Development had issued 30 non‑compliance findings since June 5, 2025, and overcharges were recorded at eight specific locations in October—Ann Arbor, Fenton, Novi, Midland, Brighton, Orion, Northville, and Bloomfield Hills.
Five Below has until December 15 to meet with the Attorney General’s office to explore a voluntary compliance agreement. If the company fails to comply, the state could pursue litigation, impose civil fines, mandate corrective measures, and require consumer restitution. The action introduces a regulatory risk that could raise operating costs, damage brand reputation, and increase compliance expenses for the retailer.
The notice signals a new regulatory risk for Five Below that could affect its operating costs and brand perception. While no immediate market reaction has been reported, investors should monitor the outcome of the investigation and any resulting penalties or corrective actions.
The action comes just before the holiday shopping season, a period when Five Below relies on its “extreme value” model. Overcharging allegations directly contradict the brand promise of $5 or less items, raising concerns about pricing integrity and customer trust.
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