A color photo of two hands exchanging money in front of a cash register.

A color photo of two hands exchanging money in front of a cash register.

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Why Do Retail Stores Ask for Your ZIP Code?

Retail shopping is never a two-way street. Many stores ask consumers for personal information when they make a purchase, but a few recent lawsuits are questioning this practice. What are stores doing with your personal information when you give it to them, anyway? Protecting your privacy is more important than ever.

Specifically, new questions are arising about the way stores use postal ZIP codes, and whether or not they’re a necessary part of most purchases. As it turns out, many of the retail locations that collect your ZIP code might not be using that information in the ways you’d expect.

 

Why Do Stores Collect Consumer ZIP Codes?

Even before the digital age was upon us (if anyone can actually remember back that far), it wasn’t at all uncommon for retail locations to ask you about your ZIP code as you made a purchase. These days, many consumers don’t even think twice about this piece of information, and we’re fairly accustomed to giving it as part of our shopping experience.

This is largely owed to the ubiquity of credit cards. These days, anything from paying for your gas at the pump to a convenience store purchase can require that you punch in your billing ZIP code if you swipe your card.

But most retail locations aren’t collecting your ZIP code because they need to verify your credit card. They’re doing it to make money.

A close-up color photo of a credit card.

Along with the first and last name on your credit card, the ZIP code that you provide can be used in a variety of ways. Avoid giving it out when you can.

Of course, this isn’t the case with every single retail store that you visit, but it’s true for many stores. In particular, arts and crafts supplier Michaels found itself at the center of a Massachusetts-based lawsuit, which brought to light the fact that it was using consumer’s ZIP codes for something more than just validating credit card transactions.

Companies collect your ZIP code because it can be used to get your full address when combined with the first and last names that are on your credit card. With this information, the company can send you direct marketing catalogues. They can also sell your information to third-parties, who will then re-sell your information to whomever the like. It’s not a very pretty picture.

As New York Times writer Ann Carrns points out:

“To get a simple idea of the cumulative impact of each tidbit of information, try searching for your name alone on Google…then search again using your name and ZIP code, and see how much more data comes back.”

What Should Consumers Do When Stores Ask for ZIP Codes?

Well, you can breathe easy, because not every single company will use consumer information this way. Similarly, not every company will insist that you give them credit card information when you’re completing your transaction.

Using cash is also a great way to circumvent this potential problem. You’re less likely to be asked for your ZIP code when you use cash, and if you are, they store won’t have a name with which to pair it.

A color photo of a hand tapping a pencil on a notebook.

Think it over before you give out ANY personal information, let alone your ZIP code.

Another easy solution is simply refusing to give your ZIP code information. Some stores may get pushy, but you’re not going to be denied a purchase anytime soon because you refused to give out your ZIP code.

A dozen or so states have also passed legislation that makes this kind of information protected as part of their consumer protection laws, which means you’re not required to give out your ZIP code.

How do you make sure to keep your information private? Let us know in the comments!

 

 

See Also

Use Gmail or YouTube? Google Might Use Your Picture or Private Info to Sell Ads
FTC Offers Consumers Protection from Telemarketer Fraud
Making Cents Off Our Senses: How Retailers Manipulate Us

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Author:

Sean Boulger is a freelance writer and storytelling enthusiast living in LA. He loves television, pop culture, minimalism, and two cats.

Comments

  1. betty

    I use cash for about 95% of my purchases. I haven’t thought twice about giving out my zip code. I have always just assumed that they were using to get an idea of where they were getting the most customers.
    You know what they say, assume makes an “ass u & me”

    Reply
  2. Sean Boulger Post author

    Right! Using cash is always a great idea, especially as we continue to digitize ourselves more and more.

    Reply
  3. Pingback: Why you shouldn’t give your ZIP code to stores

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