California Merchants Can't Ask for Customer Zip Codes

Does your company ask customers for their ZIP code? If so, you might want to take a look at the practice and consider whether it is worth the risk. The Supreme Court of California just ruled that it is a violation of state law to collect ZIP codes from customers.

The court ruled that Williams Sonoma violated the Song-Beverly Credit Card Act of 1971. Under the Act, California merchants cannot record "personal identification information." The court found that when Williams Sonoma collected the ZIP code of Jessica Pineda it crossed the line. After receiving the ZIP code, the store used a database to locate her address for marketing purposes. Retail stores are prohibited from asking a customer to provide a ZIP code in the during a credit card transaction, Reuters Legal reports.

Based on the experience of myself and a number of colleagues, there are quite a few California merchants out there that ask for this kind of information on a regular basis. Consumers often don't like it, and it's often for good reason: they have no way of knowing what is being done with that information, and whether it is being resold to another party. Merchants can now be fined $250 for a first infraction and up to $1,000 for additional violations.

"It's a terrible decision," said Bill Dombrowski, president of the California Retailers Association. The CRA filed an amicus curiae or friend-of-the-court brief on William-Sonoma's side, the Associated Press reports.

Of course the attorney for the plaintiff saw it quite differently. "This really bolsters and further protects the privacy rights of California consumers," said Gene Stonebarger, Pineda's attorney.

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