In the past two years, at least 25 retailers have been sued for more than $100 million for requesting ZIP code information from Massachusetts customers. Most of the lawsuits have been settled or withdrawn, but the practice of asking customers for their postal codes — bits of information with a marketing value of perhaps 5 cents each — has cost retailers millions of dollars in settlements and attorneys’ fees.

Most shoppers who use credit or debits cards have been asked for their ZIP codes at the checkout counters. It’s a common practice for retailers, who typically use the information to determine more about the demographics of the areas where their customers live, and sometimes to figure out their home addresses.

Preston Leonard, a Boston lawyer who has filed class-action lawsuits against companies including J. Crew and Brooks Brothers for collecting customer ZIP codes, said that retailers don’t ask for postal codes to make sure the person swiping the card actually owns it. Instead, he said, they use the information to confirm shoppers’ addresses and then bombard them with junk mail.


“A lot of people think it’s required as a condition of completing the transaction, when it’s not required by the card companies,” Leonard said. “The idea just generally is to gather as much data about the consumer as possible.”

On average, more than 7,000 people share a ZIP code. But by combining that information with the name on a customer’s credit card and submitting it to data brokers like Experian and Epsilon, the home goods company Williams-Sonoma was able for more than 20 years to zero in on customers’ home addresses every time they swiped their cards, according to sworn testimony submitted in July to a Massachusetts court by the company’s director of database marketing. Williams-Sonoma’s brands also include Pottery Barn and West Elm.

“With a ZIP code comes lots of other psychographic data: what kind of car you drive, what kind of beer you drink, what religion you might be,” said Lori Moretti, the founder of CM Communications, a Boston public relations firm. “There’s economic information in a ZIP code.”


In Massachusetts, ZIP code cases took off after a March 2013 ruling by the state’s highest court.

Ruling against the arts and crafts chain Michaels, the Supreme Judicial Court deemed the company’s policy of asking for ZIP codes during credit card transactions illegal. The court also ruled that getting unwanted junk mail was harmful enough — inflicting at least a penny’s worth of frustration — for customers to sue over it.

The plaintiff in the Michaels case said she believed that supplying her ZIP code was necessary to complete her credit card transactions at the chain. Though a lower court found that Michaels did not violate state consumer and privacy laws, the high court disagreed.

In the weeks that followed the SJC’s decision in the Michaels case, Restoration Hardware, Williams-Sonoma, Kohl’s, and Bed Bath & Beyond were all sued. At least 20 other cases have followed. About a third have been settled and about a half dismissed, while the rest continue to wind their way through the courts.

But attorneys for the companies and at least one skeptical judge call the Massachusetts lawsuits overkill. Lawyers who file the cases, they said, are simply gunning for the hefty payouts that could come with easy courtroom victories.

Many companies settle the cases against them to avoid the expense of a drawn-out legal battle. The hundreds of thousands of consumers involved are often mailed gift certificates worth $5 to $25, while attorneys typically get $100,000 or more, according to court records.


“It’s so unsavory,” said Stephanie Sheridan, a San Francisco-based partner at the law firm Sedgwick who has represented companies in ZIP code litigation in California and Massachusetts. “This is sort of low-hanging fruit, to do these cases.”

The legal complaints filed in court are sometimes so similar that the only thing changed is the name of the company being sued. (Several lawyer-plaintiff duos have sued multiple companies in Massachusetts.)

In his final ruling in a federal case involving J.C. Penney in late 2013, US District Judge Richard G. Stearns complained that the plaintiff’s attorneys demanded a payment that was far too large — $450,000 — especially since the outcome of ZIP code cases is “virtually preordained” in Massachusetts.

“It, for example, somewhat boggles my mind that 120 hours of research was really necessary,” Stearns said in late 2013. He reduced the payment to the attorneys to $75,000.

Consumers received about $3.5 million worth of gift cards.

Consumer lawyers defend their handling of such cases. It wouldn’t be worth it for an individual to challenge a chain for just $75 — the legal maximum one person can be awarded — said Greg Blankinship, a New York lawyer who sued Michaels and has been involved in seven other ZIP code suits in Massachusetts. Class-action lawsuits, he said, are the only way to get giant corporations to respect their customers’ rights.

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• Threats to personal data are everywhere

Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.