On January 7, 2019, a California lawmaker introduced legislation that would make California the first state to restrict retailers' use of paper receipts. If enacted, AB 161 (the "Skip the Slip" bill) would require businesses to issue electronic receipts—via email and/or text message—by 2022. Printed paper receipts would only be permissible when specifically requested by the customer.
According to the bill's author, Assembly Member Phil Ting (D-San Francisco), committee hearings on AB 161 are expected to begin spring 2018.
AB 161 does not provide for a private right of action, specifying it "shall be enforced by an enforcement officer." Businesses that do not comply would receive two warnings before being fined up to $300 per year.
Potential Implications of AB 161
Not only would AB 161 require many retailers to update their point-of-sale technology—which is often much more complicated than it seems—the new law (if passed) could implicate several existing privacy laws.
The California Consumer Privacy Act (CCPA), set to go into effect in 2020, creates an immediate tension with AB 161. The CCPA requires that businesses make specific disclosures before collecting any personal identifying information, including email addresses. Consumers have the right to opt out of having their information collected or sold, and can request that businesses provide a detailed accounting of how they maintain and use the customers' information. Consumers can make these requests for up to a year after their information is collected, which means that simply complying with AB 161 would trigger a whole host of CCPA provisions, even if the retailer does not otherwise collect personal information. (The scope of the CCPA, including its likely effect on businesses' treatment of consumer data, is discussed more fully in this article.)
Complying with AB 161 could also potentially trigger California's Song-Beverly Credit Card Act (Cal. Civ. Code § 1747.08), which prohibits retailers from requiring customers to share their personally identifiable information (PII) as a condition of completing their purchase. In Capp v. Nordstrom, Inc., 2:13-CV-00660-MCE-AC, 2013 WL 5739102 (E.D. Cal. Oct. 22, 2013), the district court, in denying Nordstrom’s motion to dismiss, found that an email address likely qualifies as PII subject to Song-Beverly, and thus that a retailer could violate Song-Beverly by requesting a customer's email address, even just for e-receipt purposes. (Nordstrom later filed a motion for summary judgment, but the parties settled before it was decided.)
Retailers seeking to comply with both AB 161 (in its current form) and Song-Beverly would likely need to turn to Song-Beverly's "special purpose" exception, Cal. Civ. Code § 1747.08(c)(4), which applies where there is a legitimate reason for requesting a customer's PII, such as when a retailer requests a customer's address in order to ship an item to the customer. Sending an e-receipt would likely fall under this exception—especially if California law requires the use of e-receipts. The court in Capp refused to decide at the pleadings stage whether requesting an email address for e-receipt purposes triggered this exception, agreeing with the plaintiff that this issue "cannot be resolved in a motion to dismiss as [it involves] evidentiary matter[s]." If applicable, the "special purpose" exception would not provide retailers with free reign to use PII however they want—instead, they would be limited to using the PII for the enumerated special purpose.
Finally, retailers who send digital receipts by text message rather than email may risk implicating the Telephone Consumer Protection Act (TCPA). Under this federal statute, a company sending text messages to consumers via automated means, to market their goods and services, must be able to demonstrate the recipients expressly consented in writing to receive those messages. Violators can be sued for $500-$1,500 per violation, making them a ripe target for class action lawsuits. AB 161, as written, would arguably allow businesses to send e-receipts via text message without customer consent. If those transmissions include anything that could be construed as an advertisement, plaintiffs may try to argue that they violate the TCPA.
California, the Environmental Trendsetter
Assemblyman Ting has offered several environmental justifications for AB 161, including that 10 million trees and 21 billion gallons of water in the US are used to create receipts; that receipts produce 12 billion pounds of carbon emissions; and that many receipts contain chemicals such as bisphenol-A and bisphenol-S, which have been linked to developmental and neurological problems (resulting in several Proposition 65 cases).
Notably, this is far from the first time that California has passed laws (either through legislation or ballot initiative) that restricted retail practices for an environmental purpose. Other examples include:
Proposition 65, officially known as the Safe Drinking Water and Toxic Enforcement Act of 1986, was enacted as a ballot initiative in November 1986. This law has become a favorite of the plaintiffs' bar, and has resulted in a plethora of lawsuits and the development of a cottage industry.
In August 2014, California became the first state to enact legislation imposing a statewide ban on single-use plastic bags at large retail stores. The ban was upheld by voters in a 2016 referendum. The state of Hawaii, in addition to several other cities, followed suit by banning or imposing fees for the use of plastic bags.
In September 2018, the California legislature passed a bill curbing the use of single-use plastic straws in California, which immediately led to efforts in Oregon and elsewhere to adopt similar laws.
In October 2018, California became the first state in the country to ban the sale of cosmetics tested on animals.
The legislature is also currently considering a bill, AB 129, which would declare the intent of the Legislature to, among other things, enact legislation to recognize the emerging threat that microfibers pose to the environment and water quality and would make related findings and declarations. Connecticut passed a similar law last year.
If AB 161 passes, we expect other cities or states to also consider legislation limiting the use of paper receipts.
AB 161 still has a long way to go before becoming law. Still, any potential law that requires retailers to collect every customer’s email and phone number is worth being aware of, especially as the state implements more robust privacy restrictions.