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Wal-Mart Customers ZIPping Mad Over ZIP Code Data

Nancy Gray Aug. 10, 2018

Wal-Mart customers are ZIPping mad over ZIP code data. In October 2013, Wal-Mart customers failed to convince U.S. District Court for the Central District of California Judge Manuel L. Real to certify their class, in a case involving Wal-Mart’s collection of customer names and addresses during credit card transactions. The court rejected the arguments that the class of consumers was similarly situated, denying class certification. , Undeterred, Wal-Mart customers are now attempting to convince the court to certify their class over Wal-Mart’s collection of customer ZIP code information during credit card transactions. The customers allege that the data collection was done in violation of the California Song-Beverly Credit Card Act of 1971.

While the Song-Beverly Act might seem like an esoteric piece of legislation from decades past, the statute has been front and center in recent years in cases involving retailers like Nordstrom and Williams-Sonoma.

The Song-Beverly Act is clear that businesses cannot require personal customer information during credit card transactions, including “the card holder’s address and telephone number.” In 2011, in Pineda v. Williams-Sonoma Stores, the California Supreme Court clarified the scope of “personal information” under the Act to include collecting a credit card holder’s ZIP code data. The court found that collecting ZIP codes was unnecessary to the transaction and that data collected by the high-end, San Francisco-based housewares retailer was done in violation of the law.

Any California business that handles consumer credit card transactions should be aware of the Song-Beverly Credit Card Act. Here are a few tips:

  • California businesses cannot require customer ZIP codes, e-mail addresses, or home addresses for any purpose, including for marketing purposes.

  • If you are going to request customer information, such as e-mail addresses or ZIP codes, wait until the customer has received the receipt for the transaction.

  • While the California Supreme Court ruled in 2013 in Apple Inc. v. Supreme Court, that the Song-Beverly Act does not apply to on-line transactions, in January of this year the California legislature approved SB 383, which amends the Act to apply to on-line transactions of electronic downloadable content (such as music and videos)

If your California business needs assistance navigating the intricacies of the Song-Beverly Act, or handling other transactional business issues or disputes, you can turn to Gray & Associates. Attorney Nancy Gray represents Los Angeles-area businesses in all aspects of business law, including drafting, reviewing, and negotiating agreements that protect your business’s interests, resolving contractual disputes, and addressing potential claims against your business. Put a committed, knowledgeable business litigator to work for your business today. Call Attorney Gray at (310) 452-1211 or visit Gray & Associates online for a free consultation.