The California Court of Appeals recently held in Ambers v. Beverages & More, Inc. (“BevMo”), Case No. B257487 (Cal. Ct. App., 2nd Dist., order entered May 4, 2015), that Civil Code section 1747.08 of the Song-Beverly Credit Card Act did not apply to an online purchase where the buyer elected to pick up the merchandise at the seller’s store. The court affirmed the lower court’s judgment in favor of defendant BevMo. This decision is in the wake of the California Supreme Court’s decision in Apple v. Superior Court (Krescent), 56 Cal. 4th. 128 (2013), in which the court held that the Song-Beverly Credit Card Act was inapplicable to an online transaction involving a downloadable product.
Section 1747.08, subdivision (a) provides:
Except as provided in subdivision (c), no person, firm, partnership, association, or corporation that accepts credit cards for the transaction of business shall do any of the following:
- Request, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to write any personal identification information upon the credit card transaction form or otherwise.
- Request, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to provide personal identification information, which the person, firm, partnership, association, or corporation accepting the credit card writes, causes to be written, or otherwise records upon the credit card transaction form or otherwise.
- Utilize, in any credit card transaction, a credit card form which contains preprinted spaces specifically designated for filling in any personal identification information of the cardholder.
“Personal identification information” is defined in section 1747.08, subdivision (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.”
Section 1747.08, subdivision (c), sets forth certain exceptions to the statutory prohibitions. Subdivision (c)(4) allows personal identification information (“PII”) to be collected if it “is required for a special purpose incidental but related to the individual credit card transaction, including, but not limited to, information relating to shipping, delivery, servicing, or installation of the purchased merchandise, or for special orders.”
Plaintiff Ambers alleged he was required to provide PII to complete his online purchase, in violation of Song-Beverly.
The appellate court referenced Apple, supra, in which the court found the statute inapplicable to an online transaction because the collection of PII by online retailers could serve a legitimate purpose such as fraud prevention. Brick-and-mortar retailers, by contrast, could verify identity at the time of purchase without requiring the collection of PII. For example, they could compare the signature on the credit card transaction form with the signature on the back of the card.
Here, the appellate court found the reasoning in Apple applicable to an online credit card transaction where the merchandise is picked up at the store, because ownership of the merchandise passes immediately upon completion of the online purchase, and not when it is picked up at the store. Without obtaining Ambers’ PII, BevMo would have had no means of verifying that Ambers was an authorized user of the credit card number entered on BevMo’s website before the purchase transaction was completed.
Finally, the court rejected Ambers’ argument that presentation at pickup of his identification and the credit card he had used to complete the online purchase was sufficient antifraud protection for BevMo. The court reasoned that such presentation alone would not provide sufficient recourse if the transaction later proved to be fraudulent.