As many as 37,000 Argos employees are set to receive a £64 payment after it was revealed there had been problems with staff payments.
The payments, which will affect around 12,000 staff who currently still work in Argos stores as well as thousands who have since left the company, is expected to cost the catalogue retailer as much as £2.4m in total.
Argos, which was taken over by supermarket chain Sainsbury's six months ago, will be returning the money to past and present workers who received "incorrect" payments which resulted in some staff being paid below the national living wage.
Sainsbury's said it was notified of the payments issue after HMRC "uncovered an issue with some of the Argos store systems and processes" which meant some staff ended up being underpaid.
According to the retailer the timings of staff briefings before they had clocked on to their shifts and the occurrence of security searches which could happen after workers had finished a shift could have contributed to the issue.
John Rogers, chief executive of Argos, wrote a letter to staff explaining what had happened.
It was confirmed the payments would be made to those who had been affected at the end of February.