Lululemon Settles Case Over Collection of PII During Credit Card Transaction

Lululemon USA Inc. recently settled claims arising from an alleged violation of the California Song-Beverly Credit Card Act. In 2012, the athletic clothing maker was accused of recording customer’s zip codes during credit card transactions. California’s Song-Beverly Credit Card Act prohibits collecting personal information during a credit-card transaction. Although the lower California courts had previously waivered with whether the Act’s definition of personal information included a customer’s zip code, in 2011, the California Supreme Court put the argument to rest and held that zip codes were personal information for purposes of the Act. The proposed settlement, which is still subject to court approval, would require Lululemon to provide a $25 credit to members of the class (equaling around $347,800), pay attorney’s fees and costs up to $155,000, pay a $3,000 incentive award to the plaintiff, and comply with the California state law.

Tip: This case serves as a reminder that retailers should review their in-store information collection practices. As we have reported, California is not the only state that has laws that potentially impact the type of information that can be collected during a credit card transaction.