Litigation Alert: CA Supreme Court Prohibits Zip Code Requests In Credit Card Transactions

In a decision that impacts millions of consumer transactions each year, the California Supreme Court has held that retailers who request zip codes of customers using credit cards may be held liable for monetary civil penalties of up to $1,000 per transaction. In Pineda v. Williams-Sonoma Stores, Inc.¹ (Pineda), the California Supreme Court interpreted California's Song-Beverly Credit Card Act (the Act) and ruled that the Act prohibits a company from requesting zip codes from customers paying by credit card.

In reaching this conclusion, the California Supreme Court reversed two lower courts, both of which had held that this practice did not violate the Act. In the days since the Pineda decision was issued, plaintiffs have initiated several new lawsuits against high-volume California retailers. In light of the discretion the Act gives courts to impose civil penalties, retailers that understand the reach of Pineda and conform their cash-register practices to its