Business Ethics

in the News:
Dollarama
Mehakpreet Kaur and Dylan Chappell
History
• Salim Rossy opens S. Rossy Inc in Montreal, Quebec.
19 Salim’s 10 kids are involved in the business
10
• Salim’s son, George Rossy, takes over and transitions the
19 business to a variety store and leads the company until
1973
37
• George’s son, Larry Rossy, takes over the company when
19 his father passes away. Between 1973 and 1992 he doubles
operations from 20 to 44 locations
73
 • Larry turns one of the stores into the first Dollarama, with the idea of
19 offering everything for $1.00 or less. Following the success of this store they
begin turning all the stores into Dollarama’s and start further expansion
92
• At nearly 350 stores, investment group Bain Capital buys a majority stake to
20 continue growth
04

• Dollarama is now coast to coast, exceeding 460 store

20
06
• They start offering $1.25, $1.50 and $2.00 products. On October 16th they
20 begin trading on the Toronto Stock Exchange
09
 • Their 700th store opens, and they begin offering $2.50 and $3
20 products

12
• Store 1000 opens. $3.50 and $4.00 price points added. Neil Rossy
20 is appointed President and CEO, while Larry Rossy becomes
executive chairman
15
To • Dollarama currently has over 1,500 stores in Canada with a target
of 2,000 by 2031, as well as a focus on Latin America expansion
da
y
Class action suit over
pricing
• Dollarama is sued for not displaying the price
of products properly subject to eco fees.
• Charged eco fee higher than displayed of
products such as batteries, light bulbs,
electronics and toys with batteries.
• As per Dollarama, they were charging the eco
fee, but they displayed the eco fees and prices
separately.
Stakeholders
Direct internal stakeholders- Owners, Directors
and employees. Owners have the most impact on
the Dollarama.

Direct external stakeholders- Customers,

Suppliers and Auditors.

Indirect external stakeholders- Competitors,

Media and Government.
Unethical Practices: Lack of Transparency

Violation of Trust- The fundamental relationship of trust between the businesses

and consumers is crucial. Dollarama’s failure to transparently reveal all expenses
breaches the trust. It can harm its reputation and relationships with the customers.

Unfair Advantage- As Dollarama did not properly display eco-fee charges, it

might gain unfair competitive advantage. Customers comparing prices might not
realize the true cost of the Dollarama’s products compared to those of
competitors.

Consumer Deception- Failure to properly display the total cost of product,

including any additional fees such as the eco-fees is considered as deceptive.
Consumers have the right to know the full price they will pay at the point of the
decision-making.
Consequences
Legal Repercussions- Lawsuit is
a direct consequence, results in
financial penalties and legal fees.
Regulatory Action- A lawsuit
might lead regulatory agencies to
examine Dollarama’s operations
more carefully, potentially
resulting in tighter rules and more
thorough monitoring for the
entire industry.
Reputational Damage- The news
of lawsuit and its unethical
practices can harm the
Dollarama’s reputation which can
leads to customer loss and can
negatively impact the investor’s
confidence.
Financial Impact- Beyond the
legal penalties, Dollarama might
face a decrease in sales if
consumers chooses to shop
elsewhere due to lost trust.
References

 About Us - Dollarama. (2023, July 10). Dollarama.

https://www.dollarama.com/en-CA/corp/about-us#:~:tex
t=Dollarama%20is%20born,items%20for%20%241.00
%20or%20less
.
 Iyare, O. (2024, February 21). Dollarama
reaches $2.5M settlement in class-action lawsuit.
CityNews Montreal.
https://montreal.citynews.ca/2024/02/21/quebec-dollara
ma-settlement-class-action-lawsuit/
 Do you find this practice
of excluding eco fees
misleading and/or
unethical?

 Have you had an

experience where you
expected to pay one
price, then had charges
tacked on unexpectedly?