The California Supreme Court ruled that merchants can no longer ask their customers for ZIP codes during credit-card purchases since the request violates the state’s consumer-protection law. The 1990 law prohibits businesses from requesting and recording the cardholder's "personal identification information." The court ruled that the prohibition includes a ZIP code.
The court distinguished between merchants that send the ZIP code to its own company database and merchants, such as gas stations that verify a customer’s identity by sending the ZIP code directly to a bank or credit card company. The latter practice is still legal; however, the former is not because the court contends that companies can use the information to market its own product or sell to other businesses. Retailers can still request ZIP codes when selling and shipping products online or for in-store cash purchases.
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