California Stores Cannot Ask for Zip Codes at Time of Purchase


The recent ruling by the California Supreme Court in Pineda v. Williams-Sonoma Stores, Inc., no. S178241 (Cal. Feb. 10, 2011) has unleashed a wave of lawsuits against retailers doing business in California that have asked their customers to provide ZIP codes when making in-store purchases with a credit card over the past year. In the two weeks since the Pineda decision, suits have been filed against Target, Wal-Mart, Victoria’s Secret, Bed Bath & Beyond, Crate & Barrel, Cost Plus Inc., Macy’s and Old Navy LLC, among others.

The California Supreme Court’s decision in Pineda, which was handed down February 10, 2011, held that retailers are prohibited under California’s Song-Beverly Credit Card Act (the “Act”) (Civ. Code, §1747 et seq.) from asking for and storing customers’ ZIP codes during in-store credit card transaction (which the Court found to be “personal identification information” (“PII”) for the purposes of the Act). The Act prohibits businesses from requesting that cardholders provide PII during credit card purchase transactions, and then recording that information. PII is defined in the Act as “information concerning the cardholder, other than information set forth on the credit card, and including, but not limited to, the cardholder’s address and telephone number.” Relying on the Act’s purpose to promote consumer protection, the Act’s expansive language and its legislative history, the high court concluded that the term “address” should be construed as “encompassing not only a complete address, but also its components.”

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