Why Do Stores Need Your Zip Code?

In one high-profile case, the home furnishings and cookware chain Williams-Sonoma matched names from its credit card sales and ZIP codes with a database to obtain addresses and other information for future marketing. One woman sued, saying she provided her ZIP code thinking it was necessary to complete the credit card transaction. In the resulting case the Direct Marketing Association and privacy groups showed sharply different outlooks on the practice. The case eventually made its way up to the California Supreme Court, which ruled in 2011 that stores cannot require patrons to furnish their ZIP code. California later confirmed the ruling in a law that bars firms from collecting personally identifying information during credit card transaction. Courts in other states such as Massachusetts earlier this year have reviewed the issue.

Have you ever wondered why stores ask for your zip code when you’re checking out at the register? I always figured they just wanted to know which areas shoppers came from so they could figure out where to open more stores and didn’t think about it too much. There’s much more to it, of course. Forbes gives a rundown on why we should probably never give stores our zip code.

Photo: Allie Caulfield