The One Sentence Summary: California Court of Appeal held that a consumer protection statute (Civil Code section 1747.08(a)) that prohibits retailers from requesting or requiring consumers to provide personal identification information as a condition to accepting a credit card as payment for a purchase does not apply to a refund transaction for the return of merchandise purchased with a credit card.
What They Were Fighting About: Plaintiff Absher purchased a locking gas cap from defendant AutoZone using his credit card. Within five minutes, he returned to the store and requested a credit card refund because the gas cap did not fit his vehicle. In connection with the refund process, AutoZone’s clerk requested that he fill out a return voucher form that had lines for his name, telephone number, and signature, which Absher completed. The return voucher was separate from the return receipt showing the reversal of the credit card charge. Two weeks later, Absher filed a class action lawsuit against AutoZone alleging that the company’s practice of requiring consumers to write their telephone number on return vouchers violates Civil Code section 1747.08. Each violation of the statute subjects the merchant to penalties not to exceed $250 for the first violation and $1,000 for each subsequent violation. AutoZone successfully moved for summary judgment on that grounds that the prohibitions of section 1747.08(a) on requesting “personal identification information” (defined in section 1747.08(b) as “information concerning the cardholder, other than information set forth on the credit card, and including, but not limited to, the cardholder’s address and telephone number”) do not apply to a refund of merchandise purchased by credit card. The court of appeal affirmed the trial court’s judgment.
- The court of appeal rejected plaintiff’s argument that the language of section 1747.08(a)(3) regarding “any credit card transaction” makes the statute’s prohibitions on requesting personal identification information applicable to a refund during which the merchant reverses the original credit card purchase. Examining the language of section 1747.08(a) and other subdivisions of section 1747.08, the legislative history, and the purpose for the legislation, the court concluded that the statutory prohibitions were only intended to apply to purchase transactions.
- The court concluded that the legislature’s purpose in enacting section 1747.08 was to address misuse of consumers’ personal identification information by merchants, such as for marketing purposes. The legislature determined that such information should neither be requested nor required of consumers as a condition to accepting a credit card as payment for goods or services.
- However, retailers have a legitimate interest in collecting personal identification information in a return transaction to verify that the return was bona fide and to prevent employees from manipulating returns for their own benefit. Merchants may also need to contact the consumer who made the return if they discover that use or damage of the product occurred prior to its return. Thus, there is a legitimate justification for retailers to request and obtain personal identification information in return transactions relating to goods or services that were purchased with a credit card.
- It is significant that section 1747.08(a) contains no explicit reference to exchanges, refunds, or returns. In contrast, section 1747.09 (which prohibits retailers from printing more than the last five digits of a credit or debit card account number or the expiration date on receipts) is also part of the Song-Beverly Credit Card Act and specifically refers to “an exchange, refund, or return” in subdivisions (a)(2) and (a)(3), which will become effective on January 1, 2009.