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Yes, they do.
I'm in Canada and there are a fair amount of books that I'm unable to purchase. And, I believe, regardless of the address you signed up with(or type of credit card), they use your IP address to determine your location...I could be wrong about that, though.
That doesn't bother me too much, though, as I've found Kobobooks to be cheaper and they work well for me (As a Canadian resident, at least...other's opinions differ).
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