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Massachusetts Supreme Judicial Court Rules That Retailers May Be Sued for Wrongful Use of Customer Zip Codes Recorded During Credit Card Sales

“May I have your zip code?” is an all-too-familiar question that may be going the way of the dinosaur in Massachusetts. Many retailers commonly ask customers for their zip codes when processing credit card transactions at, for example, a store check-out or a self-serve gas station. A recent decision by the Massachusetts Supreme Judicial Court in Tyler v. Michaels Stores, Inc.1 spotlights this practice, holding that zip codes are “personal identification information” subject to the restrictions of a Massachusetts consumer privacy statute governing credit card transactions. While Massachusetts retailers may properly record customer zip codes when required by credit card issuers or for product delivery, retailers may be sued if they record and use that information for their own business purposes, such as sending customers unwanted marketing materials or selling the information for profit.

The Tyler decision is significant because it sounds an important warning for Massachusetts retailers and contributes to the increasingly complex nationwide web of decisions and regulations governing the use of personal consumer information. Tyler is also noteworthy because it clarifies the nature of the injury that a consumer must allege to maintain a suit under the Massachusetts consumer protection act, Chapter 93A, Section 9.

In light of Tyler, merchants (whether in brick-and-mortar stores in Massachusetts or with online operations) should carefully review their credit card sales practices to determine whether they involve recording customer zip codes and other personal identification information, and if so, whether the company’s practices need to be revised to avoid a potential consumer class action suit like Tyler. We suggest some specific points for review further below.

Case Background

The plaintiff consumer in Tyler alleged that she had been asked for her zip code while making credit card purchases at a Michaels retail store. She provided her zip code under the mistaken impression that she was required to do so to complete these transactions, when in fact it was not required by the credit card issuer. She further alleged that Michaels had used her name and zip code in combination with other publicly available databases to find her address and telephone number, and that Michaels had then sent her unsolicited and unwanted marketing materials.

The plaintiff asserted that Michaels’ alleged actions violated a Massachusetts statute that regulates the use of personal information in credit card and check transactions, Chapter 93, Section 105. Section 105(a) prohibits businesses from writing “personal identification information” on the credit card transaction form, unless that information is required by the credit card issuer, or requested by the business because it is necessary for shipping, delivery, installation or warranty purposes and is provided voluntarily by the consumer. The statute does not specifically define “personal identification information,” but cites a credit card holder’s address and telephone number as examples. The statute also provides that violation of this law constitutes an “unfair and deceptive trade practice” under the Massachusetts consumer protection act, Chapter 93A, Section 2.2

The plaintiff initially filed a class action complaint against Michaels in federal district court in Massachusetts. In a decision by Judge William G. Young, the federal court ruled that the suit should be dismissed. Judge Young reasoned that, although the plaintiff’s zip code fell within the definition of “personal identification information” under Section 105(a), she had not suffered a legally cognizable injury because, in the court’s view, the statute was intended solely to prevent fraud, not to protect consumer privacy.3 Given the novelty of these issues, however, Judge Young did not immediately enter judgment against the plaintiff; instead, at the plaintiff’s request, he certified three questions for decision by the ultimate arbiter of Massachusetts law, the Massachusetts Supreme Judicial Court. Briefly stated, they are:

  1. Is a zip code “personal identification information” under Section 105(a)?
  2. Can a plaintiff sue for a privacy right violation under Section 105(a) absent identity fraud?
  3. Do the words “credit card transaction form” in Section 105(a) refer equally to an electronic or a paper transaction form?4

The Massachusetts Supreme Judicial Court’s Opinion in Tyler v. Michaels Stores, Inc.

The Massachusetts Supreme Judicial Court (SJC) answered “yes” to all three of Judge Young’s questions in a unanimous opinion authored by Justice Margot Botsford.

First, the SJC held that a consumer’s zip code constitutes personal identification information under Section 105(a). Given the plaintiff’s allegations that a zip code and name are enough to enable a merchant to identify a consumer’s address and telephone number – the very information that Section 105(a) identifies as personal identification information – the SJC concluded that to hold otherwise “would render hollow the statute’s explicit prohibition on the collection of customer addresses and telephone numbers, and undermine the statutory purpose of consumer protection.”5

Second, the SJC held that a plaintiff may bring an action for a violation of Section 105(a) without alleging a claim of identity fraud. Unlike Judge Young, the SJC concluded, based on the statute’s language and legislative history, that it is not limited to preventing identity fraud, but also protects consumer privacy.6

Third, the SJC held that the “credit card transaction form” referenced in Section 105(a) includes electronic as well as paper transaction forms. The court left unresolved, however, whether entering personal identification information such as zip codes in an electronic database constitutes recording on a “credit card transaction form” under Section 105(a). The SJC said that this was a factual question to be determined by the federal court.7

The SJC also discussed the nature of the injury that a plaintiff must allege to maintain a private consumer suit under the Massachusetts consumer protection statute, Chapter 93A, Section 9, the statutory vehicle for the plaintiff’s suit in Tyler. Consumer plaintiffs suing under Section 9 must prove that they have been “injured” by the unfair or deceptive practice.8 Over the years, however, the SJC has wrestled with the question of whether proof of an underlying statutory violation that constitutes an unfair and deceptive practice is sufficient, by itself, to establish the requisite injury under Section 9, or whether the consumer must plead and prove some further injury that is distinct from, though related to, the statutory violation.

The SJC took the opportunity in Tyler to clarify and reaffirm that the violation of a consumer’s legal right, even where it is expressly declared an unfair or deceptive practice under Chapter 93A, “does not necessarily mean the consumer has suffered an injury or a loss entitling her to at least nominal damages and attorney’s fees” under Chapter 93A; “instead, the violation of the legal right that has created the unfair or deceptive act or practice must cause the consumer some kind of separate, identifiable harm arising from the violation itself.”9

Thus, in a case such as Tyler, if the merchant obtains the customer’s zip code but never uses the information for any purpose thereafter, the customer cannot sue for damages under Chapter 93A, Section 9, even though the merchant’s collection of that information may violate Section 105(a) and constitute an unfair or deceptive act.10 By contrast, “[w]hen a merchant acquires personal identification information in violation of § 105(a) and uses the information for its own business purposes, whether by sending the customer unwanted marketing materials or by selling the information for a profit, the merchant has caused the consumer an injury that is distinct from the statutory violation itself and cognizable under G.L. c. 93A, § 9.”11

The SJC also noted that, while the consumer’s damages in such a case might be difficult to quantify, the consumer would still be entitled to at least the minimum statutory damages award of $25 under Chapter 93A, Section 9(3).12 This is significant because, aggregated in a class action, even such nominal damages can lead to a substantial damages award against a retailer.

Recommendations for Retailers

In light of Tyler, Massachusetts retailers should review their data collection practices in credit card transactions to determine whether they are in compliance with Chapter 93, Section 105(a). The following key points should be considered.

First, Section 105(a) generally prohibits recording customers’ personal identification information, such as their address, telephone number, or zip code, on the credit card transaction form, unless that information is (a) required by the credit card issuer, or (b) necessary for shipping, delivery or installation of purchased merchandise or services or for a warranty and is provided voluntarily by the credit card holder online or offline.

Second, Section 105(a) does not prohibit retailers from requesting and recording customers’ personal identification information separately from the credit card transaction, where customers provide this information voluntarily.

Third, where the retailer records the customer’s personal identification information on the credit card transaction form in violation of Section 105(a), it has by definition engaged in an unfair and deceptive practice. While this practice alone, without more, may not expose the company to a consumer suit, it should be discontinued.

Finally, where the retailer records the customer’s personal identification information on the credit card transaction form in violation of Section 105(a), and then uses that information for its own business purposes, such as sending customers unwanted marketing materials or by selling the information for a profit, the company may be subject to a consumer suit under Chapter 93A, Section 9.

Like all areas of data privacy, regulation of consumer information such as zip codes in credit card transactions is a rapidly evolving field that requires constant monitoring. Indeed, the Massachusetts SJC’s opinion in Tyler is the latest of several recent and significant decisions concerning the collection of consumer information during credit card transactions. In a similar case involving Williams-Sonoma, the California Supreme Court held in 2011 that a California statute generally barring requests for personal identification information during credit card transactions, except for certain specified reasons, applies to and prohibits requests for consumer zip codes.13 More recently, in February 2013, the California Supreme Court carved out a major exception to this statute, holding in a 4-3 decision that it does not apply to online sales of products that are downloaded electronically, such as the audio and video files sold through the iTunes store of the defendant, Apple, Inc.14 Further, the determination of the SJC in this case leads to the question of whether this holding represents a possible judicial expansion of the definition of “personal information” in Mass. Gen. Laws c. 93H, a breach of which triggers the obligation to notify affected residents of the Commonwealth.

For further discussion of these cases and related issues, see Mintz Levin’s client advisories and blog posts at


1Tyler v. Michaels Stores, Inc., No. SJC-11145, 2013 Mass. LEXIS 40 (March 11, 2013).

2See Mass. Gen. Laws c. 93, § 105(d) (cross-referencing Mass. Gen. Laws c. 93A, § 2).

3Tyler v. Michaels Stores, Inc., 840 F. Supp. 2d 438, 445-446, 449-451 (2012).

4See id. at 452 n.10; Tyler v. Michaels Stores, Inc., C.A. No. 11-10920-WGY, 2012 U.S. Dist. LEXIS 14100, at *11 (Feb. 6, 2012).

5Tyler v. Michaels Stores, Inc., 2013 Mass. LEXIS 40, at *16-19.

6Id. at *6-11, *19-20.

7 Id. at *27-30 & nn.21, 22.

8See Mass. Gen. Laws c. 93A, § 9(1).

9Tyler v. Michaels Stores, Inc., 2013 Mass. LEXIS 40, at *22.

10Id. at *24-25 n.17.

11Id. at *23.

12Id. at *26-27 n.20.

13Pineda v. Williams-Sonoma Stores, Inc., 246 P.3d 612 (Cal. 2011) (construing Cal. Civ. Code § 1747.08, which prohibits requesting and recording personal identification information as a condition for accepting a credit card payment).

14Apple Inc. v. Superior Court, 56 Cal. 4th 128 (2013).

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Chip Phinney

Cynthia J. Larose

Member / Co-Chair, Privacy & Cybersecurity Practice

Cynthia J. Larose is Chair of the firm's Privacy & Cybersecurity Practice, a Certified Information Privacy Professional-US (CIPP-US), and a Certified Information Privacy Professional-Europe (CIPP-E). She works with clients in various industries to develop comprehensive information security programs on the front end, and provides timely counsel when it becomes necessary to respond to a data breach.