zip-code.jpgAs previously reported, a California Supreme Court ruling has made it illegal for stores to ask for a customer’s zip code when paying with a credit card. To do so, the court ruled in February, violates California’s Credit Card Act, which prohibits businesses from requesting and then recording “personal identification information” during credit card transactions.

But it looks like not every retailer got the message — as the Examiner reports, since that ruling, more than 150 class-action lawsuits have been filed against companies like Bed, Bath & Beyond, Big 5 Sporting Goods, Burlington Coat Factory, J.C. Penney, Kohl’s, Office Depot, Officemax, The Gap, Pier 1 Imports, Urban Outfitters and Wal-Mart. 40 of those cases have been filed in San Francisco.

Plaintiffs say that these companies are continuing to demand their zip code information for nefarious marketing purposes by claiming the zip’s necessary to process the transaction. Bill Dombrowski, president of the California Retailers Association, says these cases are “unfounded” and that the zips are being requested for fraud detection.

Have you had your zip code requested by a company since the ruling? Did you give it out?

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the author

Always in motion. April Siese writes about music, takes photos at shows, and even helps put them on behind the scenes as a stagehand. She's written everything from hard news to beauty features, as well as fiction and poetry. She most definitely likes pie.

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  • Agent37

    What about stores that ask for ID when paying by credit card? They could grab zip info off there.. It happens to me all the time, I never pay attention as to whether or not they are keying in a zip.

  • themikey

    And what about those gas pumps that require you to punch in your zip code before they will process your credit card gas purchase??

  • annielin

    Yes, quite a few gas stations actually require you to punch in a zip in order to complete the transaction …

  • salsaman

    Yeah the gas pumps are still asking. I always thought it was a loose way to get confirmation that I’m actually the card holder, so while I want to test putting in 12345… will that work? This sounds plausible: “Most of the time, it’s being used to verify the credit card is your credit card, so it’s for fraud prevention.” The Supreme Court ruling doesn’t make sense to me– if I’m using my credit card, I expect the vendor to be able to know who I am, so having my ZIP code doesn’t seem like such a big deal.

  • Eve Batey

    Hey, the mikey, as the February story on the ruling we link to in this piece notes:

    “the ruling does not apply to gas stations’ collection of ZIP codes because those outlets do not record the codes and instead send them directly to banks for purposes of credit card authorization.”

    So gas stations can and will keep asking for your zip, under this ruling.

    To Agent37’s question (from the same story) “The law also allows merchants to ask to see a customer’s identification, such as a driver’s license, for the purpose of verifying a credit card owner’s identity, so long as the merchants do not keep the information.”

    So they *shouldn’t* be pulling your zip off your ID and entering it, per this law. Are they anyway? That might be worth watching for, if you’re concerned.

  • LibertyHiller

    Hey Eve, California law may allow merchants to ask for ID, but the processors (MasterCard, Visa, etc.) consider it a violation of their terms of service. As I recall, merchants who do this can be fined by the processors, or even lose access to their services. MasterCard’s website has a mechanism that lets cardholders file a complaint against merchants who insist on ID; I assume that Visa has something similar.

  • themikey

    Gotcha Eve, thanks for that piece….

  • themikey

    Gotcha Eve, thanks for that piece….

  • Eve Batey

    Thanks, LibertyHiller! My (admittedly limited) understanding of this policy (which, to be clear, is not related to the topic of this story, the CA Supreme Court ruling and subsequent suits), is that under most credit card company terms of use for retailers, merchants are free to *ask* for ID to prevent fraud, they’re just not allowed to refuse a transaction if you won’t hand over your ID.

    I’m basing this off what I found here, and, in a more recent piece, here on Consumer Reports. If you know otherwise, let’s hear it — this is interesting!