Dollar General (DG), Dollar Tree (DLTR), and Family Dollar, which is owned by Dollar Tree, has been fined $1.2 million for selling expired over-the-counter drugs by the New York Office of the Attorney General.

The violation was discovered during a multi-month undercover investigation into the discount chains’ sale of over-the-counter drugs that were expired. Additionally, the attorney general’s office investigated Dollar General’s for selling obsolete motor oil, and Dollar Tree and Family Dollar for not complying with bottle deposit laws in New York.

Dollar General was also fined $1.1 million for selling obsolete motor oil while Dollar Tree and Family Dollar have agreed to comply with New York bottle deposit laws. The companies were fined $100,000 for the bottle deposit violations.

During the expired drug investigation, the attorney general’s office found over-the-counter drugs that were “months beyond their expiration dates” at the stores. In New York, it is illegal to sell over-the-counter drugs that are beyond their expiration date, the attorney general office said in a statement.

As part of their $1.2 million settlement, Dollar General, Dollar Tree, and Family Dollar must make “significant reforms to their policies and procedures.” They are required to enact a system to record and track expiration dates of over-the-counter drugs, enforce the policies and procedures, requiring employees to rotate stock, conduct monthly audits, and conduct a third-party audit at 10 percent of their stores for at least one year.

“It’s a tough pill for New Yorkers to swallow that the over-the-counter drugs they were buying may have been expired,” New York Attorney General Letitia James said. “New York consumers have a right to expect that products on store shelves are safe, fresh and suitable for their advertised use.

“These settlements will ensure that Dollar General, Dollar Tree, and Family Dollar will not only pay both a substantial fine and damages, but, more importantly, update their business practices to comply with the law so that no expired over-the-counter drugs are sold to a New York consumer again.”

Shares of Dollar Tree stock were up 0.89 percent as of 1:04 p.m. ET on Monday while shares of Dollar General stock were up 1.32 percent at the same time. 

Dollar Tree A view of the sign outside the Dollar Tree store in Westminster, Colorado on Feb. 26, 2014. Photo: Reuters/Rick Wilking