In a decision with implications for all California retailers, the California Supreme Court ruled [PDF] yesterday that a customer may not be asked to provide his or her ZIP code during an in-person credit card transaction.  At issue in Pineda v. Williams-Sonoma Stores, Inc. was the scope of California’s Song-Beverly Credit Card Act of 1971, Cal. Civ. Code § 1747.08, which provides that (subject to narrow exceptions) no entity that “accepts credit cards for the transaction of business” may:

  • “Request, or require as a condition to accepting the credit card as payment . . . the cardholder to write any personal identification information upon the credit card transaction form or otherwise”;
  • “Request, or require as a condition to accepting the credit card as payment . . . the cardholder to provide personal identification information, which the [entity] accepting the credit card writes, causes to be written, or otherwise records upon the credit card transaction form or otherwise”; or
  • “Utilize, in any credit card transaction, a credit card form which contains preprinted spaces specifically designated for filling in any personal identification information of the cardholder.”

“Personal identification information” is defined as “information concerning the cardholder, other than information set forth on the credit card, and including, but not limited to, the cardholder’s address and telephone number.”  The question before the court in Pinedawas whether “personal identification information” also includes a customer’s ZIP code.  In a unanimous decision, the California Supreme Court held that it does, reversing the lower court and allowing a putative class action against Williams-Sonoma to proceed.   

At least 14 other states and the District of Columbia have laws similar to the Credit Card Act–many of which provide private rights of action–but these appear to have been rarely, if ever, enforced.  By contrast, California has recently seen a surge in Credit Card Act litigation.  Today’s ruling suggests that the surge will continue.