On February 10, 2011 in the case of Pineda v. Williams-Sonoma Stores, Inc., California’s Supreme Court held that it is a violation of California law for businesses to request and record a credit card holder’s ZIP code in connection with a credit card transaction, subject to limited exceptions. Notably, the Supreme Court ruled that its decision is retroactively effective.

In June 2008, plaintiff Jessica Pineda sued Williams-Sonoma stores alleging, among other claims, that Williams-Sonoma violated California’s Song-Beverly Credit Card Act of 1971 (the Credit Card Act) when a Williams-Sonoma cashier asked plaintiff for her ZIP code during a credit card transaction. Plaintiff provided the information, believing that doing so was a condition to completing the purchase. Williams-Sonoma subsequently ran the plaintiff’s name, credit card number, and ZIP code information through computer software that conducts reverse look-up searches and traced the plaintiff’s street address – previously unknown to Williams-Sonoma; the store then stored plaintiff’s information in its database. According to the complaint, it was Williams-Sonoma’s practice to use that information for marketing purposes and for potential sale to third party businesses.