In a victory for privacy rights advocates, the California Supreme Court recently ruled that California merchants cannot ask customers for their ZIP code during a credit card transaction. Specifically, the Court in Pineda v. Williams-Sonoma Stores, Inc. said that asking for a zip code violates the California Song-Beverly Credit Card Act (Read the full decision on the California Courts website at www.courtinfo.ca.gov/). The Act prohibits merchants from asking customers for personally identifiable information (PII) in connection with a credit card transaction. PII includes the customers address and telephone number. The Court found that the legislature intended to ban collection of all parts of a customers address, which includes the ZIP code. Merchants that violate the law will face up to a $250 penalty for the first violation and up to $1,000 for each subsequent violation.

The plaintiff in this case argued that merchants use ZIP code information for their own purposes or sell the information to other businesses. Justice Carlos Moreno pointed out that a merchant can easily discover a customers full address once the business knows the customers name and ZIP code.