The California Court of Appeals held that zip codes do not qualify as "personal identification information" under the Song-Beverly Credit Card Act of 1971, found at Cal. Civ. Code ยง 1747.08 et seq. Party City Corp. v. Superior Court of San Diego County, D053530, Cal. Ct. App., Dec. 19, 2008.
Section 1747.08(a)(2) of the Act states that a merchant who accepts credit cards may not request or require as a condition to accepting payment that the cardholder provide personal identification information, which the merchant then records on the credit card form or otherwise. The plaintiff in this case alleged that Party City violated this provision of the Act by requesting and recording a customer's five-digit zip code prior to completing a payment transaction. Party City asks all customers, regardless of payment type, for their zip code for marketing purposes, but does not require this information as a condition of payment. The company makes these zip codes available to its marketing department alone and the information is transmitted without related customer information.
The Court looked to numerous sources, including the plain language of the statute, its legislative history, and related federal regulations to reach the conclusion that a merchant who collects zip codes from customers does not violate the statute. The legislative history of the Act indicated that the Act's purpose is to allow lawful and appropriate use of credit cards in the marketplace while protecting consumers from unauthorized privacy violations. Federal regulations concerning zip codes demonstrate that the purpose of zip codes is to facilitate the routing and sorting of mail, not to identify individuals. A zip code is not helpful in locating or identifying individuals, as nearly 25,000 people live in the plaintiff's zip code alone. Furthermore, the Act created significant new penalties for violations, which supports a narrow reading of the statute. Given these facts, the Court concluded that zip codes are group rather than personal information, and nothing in the Act prevents a merchant from requesting a customer's zip code during a transaction.
It is important to note that the Court emphasized that its holding was limited to a five-digit zip code and did not address whether the more specific nine-digit zip code would be considered personal identification information.
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