What your zip code tells retailers

By Amy Davis - Reporter/Consumer Expert

HOUSTON - "Can I get your zip code?" It's a common question at check-out; but do you know why retailers want the information?

And do you really have to answer?

Consumers we asked thought retailers needed their zip code for security reasons or to track which areas shoppers live.

University of Houston's Bauer College of Business Professor of Marketing Partha Krishnamurthy says there's much more value in the 5 digit number for retailers.

"When they know that you belong to a particular zip code, the amount of data available about each and every one of us in 2 or 3 data warehousing firms is phenomenal," Krishnamurthy explained.

He says retailers already have your name if you used a credit card.

Stores realize most customers would hesitate providing their address; but with a zip code, they can get your address along with a ton of other personal data, like where you like to shop, recent purchases... even what you're planning to buy.

"I don't think I want everybody and their uncle to know what it is I've been shopping for," said Krishnamurthy.

At least two states agree.

After civil court cases in Massachusetts and California, the respective Supreme Courts of those states have ruled that collecting zip codes from credit card purchases violates state consumer protection laws.

In Texas, for now, you've got to safeguard the data yourself.

"Can we say no?" Davis asked Krishnamurthy.

"We can say no. We can give the wrong zip code. Two things we can do," he replied.

There is one exception.

You do have to input your zip code when paying with a credit card at a gas pump.

It is actually a security precaution to try and reduce the chances of a thief using your card.

You can also opt of receiving credit and insurance offers and other unsolicited mail.

All of the information you need to do that is at this link to the Federal Trade Commission (click here)

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