California Court Further Limits Song-Beverly Credit Card Act

On May 4, 2015, an intermediate appellate court in California held that the Song-Beverly Credit Card Act of 1971 (Song-Beverly), Cal. Civil Code § 1747.08, does not apply to online transactions involving the sale of merchandise that the buyer chooses to pick up at a retail store.

In Michael Ambers v Beverages & More, Inc., No. B257487 (2nd Appellate District, Division Two, May 4, 2015), plaintiff alleged that he was required to provide personally identifying information in the course of an online purchase of alcohol, in violation of Song-Beverly. Song-Beverly prohibits a retailer from requiring the purchaser to provide personally identifiable information, such as address and telephone number, as a condition of a credit card sale if the information is not necessary to complete the sale. Plaintiff later picked up his purchase at a BevMo retail store, where he was required to show identification and the credit card used to make the online purchase.

Citing the California Supreme Court’s decision in Apple v. Superior Court (Krescent), 56 Cal. 4th 128 (2013), the appellate court noted that Song-Beverly predated, and thus does not refer to, online credit card transactions. In Apple, the Court held that the statute does not apply to online transactions regarding downloadable products, but left open the question whether it applies to other online credit card transactions. The appellate court found that both the reasoning and the analysis in Apple applies “with equal force” to online credit card transactions where the merchandise is picked up in the retail store. Noting that title to the merchandise passed to plaintiff upon completion of the online transaction, the appellate court held that BevMo was entitled to require personally identifying information at the time of the transaction to verify that plaintiff was the authorized user of the credit card entered to pay for it. Although plaintiff argued that showing identification and the credit card at time of pickup was sufficient anti-fraud protection, the appellate court disagreed, because BevMo no longer held title to the goods at that point and would have no recourse had the transaction then proven to be fraudulent.

BevMo is just the latest in a series of opinions interpreting Song-Beverly in the context of an increasingly online marketplace. The day after the BevMo opinion was filed, the Ninth Circuit certified a question regarding interpretation of the Act to the California Supreme Court. In Davis v. Devanlay Retail Group, No. 13-15063 (May 5, 2015), the Ninth Circuit asked for clarification whether the Act prohibits a retailer from requesting personally identifiable information if is not objectively reasonable for the customer to interpret the request as a condition precedent to using the credit card (e.g., requesting the information after completion of the transaction). The California Supreme Court’s resolution of that question could have a significant impact on retailer practices in the state of California.

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Catherine M. Valerio Barrad
Amy P. Lally
Alan Charles Raul

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