Why do Stores Covet Your Zip Code?

After paying for purchases with a credit card, I’ve always wondered precisely why stores asked me to hand over my zip code. Not that I gave it to them of course. I knew their request had to be for their own benefit – not mine. So I always gave them a fake number, one that couldn’t target me with ads and promotions further down the line. Though I still didn’t know how they could manage to finagle my 5 digit numbers into a more complete dossier.

Thanks to an article in Forbes, I now know. Direct Marketing Service Companies are able to take that zip code, combine it with your name on your credit card receipt, and spin it through their vast consumer data bases to come up with your address, phone number, email address and spending history.

When promoting their services, Direct Marketing Company, Harte-Hanks, claims accuracy rates near 100%. And Fair Isaac Corp. boasts their expertise in this area can strengthen a company’s direct marketing sales up to 400%. And do it without “ complicating or jeopardizing the sales process by asking for an address or phone number, or complying with regulations.”

This profiling process costs money, however, and not all companies are willing to spend it. For these companies your zip code can tell them whether or not their advertising and marketing efforts are successful in specific areas. It can help them identify which areas need more attention and improvement.

There is one place, however, that apparently doesn’t involve using our zip codes to increase company profits and that’s gas stations where zip codes are used to combat fraud. After buying gas, someone using a stolen credit card is often unable to enter the correct zip code. Thieves also like to test cards to see if they’re live at gas pumps where they won’t have any face-to-face confrontations and chance having the card confiscated.

So beware giving a fake zip code at gas stations. Unless you like the dubious kick of being treated like a criminal.

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