California Supreme Court Issues ZIP Code Prohibition Ruling With Potential National Impact

In a landmark ruling, the California Supreme Court ruled last week that ZIP codes are "personal identification information" under California's Song-Beverly Credit Card Act of 1971 (the "Credit Card Act"). The decision in Pineda v. Williams-Sonoma Stores, Inc. reversed two lower court decisions that reached the opposite conclusion. The Court's decision effectively prohibits any business operating in California from requesting and recording cardholders' ZIP codes during credit card transactions at the physical point-of-sale.

The plaintiff used her credit card to buy items at a Williams-Sonoma store and was asked to provide her ZIP code. She provided it because she believed it necessary to complete the sales transaction. The plaintiff alleged the store then used her name and ZIP code in a "reverse look-up" process to locate her home address, and then allegedly added her to a marketing database.