RFID is About Loss Prevention, Too

Filed in archive Retail on September 7, 2004

BusinessWeek has an interesting article about the high hopes for RFID to prevent shrinkage in the retail industry.

Every year retailers lose about US$33.6 Billion due to shoplifting, employee theft, administrative errors, etc. RFID offers a better way to prevent losses like these. Here is how RFID is designed to help:

In some ways, the RFID systems of the future aren't really so different from current EAS [electronic article surveillance] systems in stores now. Each item would be tagged, and an alarm would sound when an item leaves the store without being paid for. But while tags in use now are simply either live or disabled, the new tags would be able to store all kinds of information about the product -- where it was made, how much it cost, what other items it should be displayed with -- all information that can help stores better manage inventory.

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Already Checkpoint is in trials with several retailers that are putting RFID chips in hard plastic tags. That solves two problems, says [Checkpoint spokesman] Shoemaker: The cost (since the tags are reused) and privacy concerns (since they're removed at the point of sale). And Checkpoint has a new line of EAS systems that are designed to be RFID-compatible. "It's kind of like buying a computer with expansion slots," says Shoemaker, who adds that customers want to be ready to implement RFID when it's ready for prime time.

The article says RFID systems to prevent loss in retail settings are still years in the future.

[Hat tip to Mario at Duchs.com.]