Is it a Bad Thing to Give Stores Your Zip Code When You’re Shopping?

While many of us do the bulk of our shopping online throughout the year, as we gear up for the holidays, it’s inevitable we will hit up some brick-and-mortar stores. When it comes time to check out at some of these retail stores, you might be surprised how many ask for personal information, particularly your ZIP code, in order to complete the transaction.

Though it may appear innocent enough, in reality, a lot of retailers are actually turning to asking customers for ZIP codes for marketing purposes. In recent years, Urban Outfitters was hit with a class-action complaint over the practice, arguing that Urban was implying to consumers that providing their zipcode was mandatory to complete their credit card transaction. We did our research, too, and what we found may surprise you. Read ahead for a breakdown on the controversial practice of stores asking for your zip code when you’re shopping.

According to Ann Carrns in her article for The New York Times:

Stores want your ZIP code because, combined with your name from your credit card, they can use it to find out other information about you from commercial databases, like your full mailing address. They may even sell the information to data brokers, who sell it to other marketers.

So essentially, retailers are seizing the opportunity to potentially make money by asking for your ZIP when you checkout.

If the retailer you provide your ZIP code to decides to sell your info to a direct marketing company, they can locate your mailing address based on your credit card name and your ZIP. This means you’ll probably soon be flooded with enough catalogs, magazines, and other annoying snail mail to make you second-guess ever brick-and-mortar shopping again.

To get a quick idea of how much of your personal information has circulated as a result of giving your zip code to retailers, Carrns suggests a simple Google search. “Try searching for you name alone on Google search, and then search again using your name and ZIP code, and see how much more data comes back,” she writes.

Technically, no. However since many consumer-privacy issues and laws are handled at the state level, it can be difficult to regulate. According to an article in TIME:

In the following states, it’s illegal for a clerk to tell you they require personal information to run your credit card: California, Delaware, Georgia, Kansas, Massachusetts, Maryland, Minnesota, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas and Wisconsin, plus Washington, D.C.

The bottom line: If you’re uncomfy giving out personal info, your best bet is to just politely decline when asked for your ZIP at checkout. Retailers will obviously process the sale regardless (unless they specifically need your info to complete the transaction) and you won’t have to worry about an overcrowded mailbox in the new year.