Its the last 4 digits of the account holders social and the billing zip.
It only asks you once when you get the device subsidized on the initial activation when it arrives unactivated. Its not the case always but I saw it before when I ordered my iphones online before.
Sucks to give that out to someone you dont know but if Im the seller/prior owner of that phone and the poor person that paid me cannot use it then I'd feel bad. So its either give him that info so he can enter it and use the phone he paid you for or return it and give him his money back.