Privacy Concerns

It is feared that even with all RFID benefits, the public is afraid of the possible infringement into their privacy. The potential abuse of information obtained from product tracking tags has alerted the privacy advocates.

Wal-Mart and other companies have started tagging items in stores in US, but none of them have yet installed devices that will kill the tags at the checkout. (The kill switches would let retailers and consumers disable the chips at the checkout counters.) The argument is that metals, plastics and liquids all block radio signals before they reach the RFID reader devices. Even human body, which contains a lot of water, distorts the RF waves.

Wal-Mart however insists that individual items will not be tagged for many years to come. The company is emphatic that the RFID tags don't contain or collect any additional data about customers. In-store RFID testing has stopped and the focus now is on installing RFID systems in warehouses and distribution centres instead.

The Future

The future of RFID technology use in retail business is bright once the privacy concerns are sorted out. Yet it is too early to predict how Wal-Mart will handle those suppliers who fail to comply with the 2005 and 2006 deadlines.

"Sanford C. Bernstein & Co., a New York investment research house, estimates that Wal-Mart could save nearly $8.4 billion per year when RFID is fully deployed throughout its supply chain and in stores" [eweek.com]. With so much profit to be raked in year after year, it is understandable why Wal-Mart is pursuing this technology so aggressively!