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Marketing Without the ZIP

A California ruling makes it illegal to collect customer ZIP codes in-store. Time to find more innovative ways to collect data on your customers.

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This story appears in the May 2011 issue of Entrepreneur. Subscribe »

We've all been there. You go to buy something innocuous in a store--batteries, a $20 alarm clock--and the cashier asks for your ZIP code. If you're willing to risk the ire of the people in line behind you, you may balk and ask what purpose it serves the retailer to have that information. As sure as sunrise, the answer comes back: "Oh, they use it for marketing. Have a nice day."

Well, not in California they don't--not as of mid-February, and not for store purchases with a credit card. That's because the California Supreme Court reversed two lower-court decisions to say that retailer Williams-Sonoma, in asking an in-store credit card customer for her ZIP code, was really making an unlawful request for personally identifiable information (PII). The court held that the request was a violation of California's Song-Beverly Credit Card Act of 1971, which prohibits retailers from asking for PII such as an address or a telephone number when customers make a credit card purchase.

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