Zip Ruling Prompts Consumer Lawsuits

Walmart, Target, Macy's and Cost Plus are just a few of the retailers facing lawsuits.

February 17, 2011

SAN FRANCISCO - Just one week after California's Supreme Court rule it's illegal for store clerks to ask customers for their zip codes, customers have filed more than a dozen suits against national retail chains, the Associated Press reports.

The decision against Williams-Sonoma, whereby the court explained that a zip code is part of a customer's address and as such, is protected by a state consumer privacy law that forbids stores requiring addresses during credit card transactions, triggered the lawsuits, most of which were filed in San Francisco or Los Angeles.

Among the retailers facing lawsuits are Walmart, Target, Macy's and Cost Plus.

Attorney Mike Burns, who represents Michaels Stores in a similar zip code case, said assessing damages is difficult. State law calls for maximum fines of $250 for the first violation and $1,000 for each additional one, which could result in millions of dollars of liability. However, judges are free to award token fines for any violations, according to one of the Supreme Court justices who contributed to last week€™s opinion.

California's consumer privacy law exempts some businesses, such as gas stations that require zip codes for security purposes. Additionally, unlike retailers, gas stations don't collect zip code data and store it in databases that allow the consumer to be identified and targeted for future marketing initiatives.

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