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Court rules businesses can’t require ZIP codes at check out

Consumers caught a break in one state, as it has been ruled illegal to require personal information, including ZIP codes.



ZIP codes at checkout counters

Many retailers across the nation require a ZIP code be given or entered at the checkout counter, but following various states have ruled this requirement as illegal, as the retailers are using the information to look up consumers’ mailing addresses by matching name and ZIP code, and sending unsolicited promotional mailers.

Two years ago, California ruled retailers could not collect ZIP codes, and now, the Supreme Court of Massachusetts has ruled the same after a consumer filed a class-action lawsuit against craft chain store Michaels for being sent mail he did not opt in to, simply based on his purchase at the store.

The Court ruled that Michaels violated the state’s consumer protection law by asking for the ZIP codes, because although the current laws do not specifically mention ZIP codes, they do forbid requiring personal information be given to any retailer, and ZIP codes were classified by the court as personal information.

Although the plaintiff was only entitled to the minimum damages of $25 for violation of privacy, retailers in the state may no longer require personal information, including ZIP codes.

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Translating the law

The disagreement in Massachusetts revolves around the translation of the laws that are over 20 years old – Michaels’ attorneys argue the laws are intended to prevent identity theft, but the court agreed with the Plaintiffs’ argument that the laws against collecting information protects consumers from unwanted contact from merchants.

Additionally, it was argued that consumers don’t know that they aren’t required in the state to give out that information, but in other states, a ZIP code is required as “verification” at gas pumps for example, so this ruling will be looked at in other states.

Consumer protection groups support the findings, citing numerous complaints about various retailers engaging in similar practices from requiring ZIP codes to email addresses to phone numbers in an effort to connect with consumers whether they opt in or not. Doing so, particularly in conjunction with commercial databases to identify individual customers has been ruled illegal in two states so far, and others will likely follow.

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Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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