Marketing Gets Tougher: Court Rules Retailers Can’t Request ZIP Codes

California’s high court has ruled that retailers don’t have the right to ask customers for their ZIP code while completing credit card transactions, saying that doing so violates a cardholders’ right to protect his or her personal information. The ruling, written by Justice Carlos Moreno, overrules earlier decisions by trial and appeals courts in California. It points to a 1971 state law that prohibits businesses from asking credit cardholders for “personal identification information” that could be used to track them down.

The court’s judgment states that asking for the number, and then piecing that 5-digit number together with other information like a cardholder’s name, “would permit retailers to obtain indirectly what they are clearly prohibited from obtaining directly, (therefore) ‘end-running’” the intent of California state laws. “The legislature intended to provide robust consumer protections by prohibiting retailers from soliciting and recording information about the cardholder that is unnecessary to the credit card transaction,” the decision states. “We hold that personal identification information … includes the cardholder’s ZIP code.”

Privacy lawyer Venkat Balasubramani, at the Law & Technology Marketing Blog, points out that this ruling could later lead to legal problems for the collection of IP addresses, which are like the ZIP codes of the digital realm. “[T]his case highlights how online and off-line retailers live in different worlds,” writes Balasubrami. “Off-line retailers go to great lengths to identify and stay in touch with their customers. Online retailers can just use cookies, ask consumers to check a box on their website, or get consumers to like their Facebook page.”

The full story can be found HERE.