I’ve had it happen dozens of times – maybe hundreds. You have too. You make a purchase and present your credit/debit card for payment, and the clerk asks you what your ZIP code is. Why? They want to send marketing stuff to you – to your home address, which they can determine IF you give them the ZIP code.
How does this work? In one of their brochures, direct marketing services company Harte-Hanks describes the GeoCapture service they offer retail businesses as follows: “Users simply capture name from the credit card swipe and request a customer’s ZIP code during the transaction. GeoCapture matches the collected information to a comprehensive consumer database to return an address.” In a promotional brochure, they claim accuracy rates as high as 100%.
Fair Isaac Corp., a company best known for its FICO credit scores, also offers a similar service which they say can boost direct marketing efforts by as much as 400%. “FICO Contact Builder helps you overcome the common challenges of gathering contact information from shoppers—such as complicating or jeopardizing the sales process by asking for an address or phone number, or complying with regulations,” it says. “It requires minimal customer information captured at point-of-sale, just customer name or telephone number and the customer or store ZIP code.”
Because customers are usually not told that stores are building a marketing database from the transactions, some object.
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.