Remember that class action suit we told you about last year, in which a group of customers alleged that they were asked for their zip codes upon making purchases at Urban Outfitters and Anthropolgy “under the guise that [such info] is required to make a purchase with a credit card" and then the retailers used that info for direct marketing campaigns? The group of plaintiffs alleged that Anthropologie, etc. violated the Consumer Protection Procedure Act and the Use of Consumer Identification Information Act, which prohibits any person, as a condition of accepting a credit card as payment, from requesting or recording the address or telephone number of a credit card holder on the credit card transaction form. Well, the U.S. District Court for the District of Columbia recently dismissed it. The judge held that a ZIP code does not constitute an “address" and that the retailers did not condition the credit card transaction on consumers providing their ZIP codes.
Turns out, the Anthropologie case isn't the only lawsuit of its kind underway. Urban Outfitters Inc. and its subsidiary Free People are involved in a similar suit in Massachusetts. Plaintiff Lauren Miller claims she used her debit card to make a purchase at a Free People store in Boston last year and was asked for her ZIP code even though her card didn't require it. She alleges that she began receiving unsolicited advertisements thereafter. According to a Massachusetts federal judge, Nathaniel M. Gorton, Free People violated fair business laws by collecting customers' ZIP codes during credit card transactions and using the information to send them junk mail.
Similar cases have been hear in California, where the courts have ruled that retailers could be held liable for conditioning acceptance of credit cards on a customer providing personal identification information.
The takeaway for retailers here should probably be this: If you ask for a shopper's information, such as their ZIP code, email, etc., at the time of purchase, do it before or after (and NOT in connection with) a credit or debit card transaction. More to come, maybe ….