California Court Allows Retailers To Collect Zip Code Data

Who would have thought zip codes could cause so much of a fuss? Retailers and restaurants know, because scores of them have been sued in class actions throughout California on the dubious theory that recording a customer's zip code at the point-of-sale violates California law. On December 19, 2008, the California Court of Appeal said no.¹ The ruling in Party City Corp. v. Superior Court may doom all of those cases.

Background

In the past year, plaintiff's lawyers have filed class action suits against over 40 retailers, alleging that requests for zip code information during credit card transactions violated California law. The plaintiffs' claimed such requests violated the Song-Beverly Credit Card Act of 1971² (the "Act") because zip codes constitute "personal identification information," which merchants cannot demand as a condition of engaging in a credit card transaction. Under the Act, a retailer that accepts credit cards may not "request, or require as a