While Wal-Mart Stores Inc. joins the high-tech industry in celebrating its recently launched supply-chain management Radio Frequency Identification pilot program, consumer privacy groups are shaking their collective heads, concerned about the implications RFID tagging has on consumer privacy rights.
Wal-Mart launched its trial with eight product manufacturers, which are now tagging cases and pallets of products destined for seven Supercenter stores and one distribution center in the Dallas/Fort Worth metro area with electronic product codes.
The pilot program leads up to Wal-Mart’s mandate, which calls for its top 100 suppliers to put EPC tags on cases and pallets of goods going to Wal-Mart stores and Sam’s Club locations in the Dallas area by January.
EPCs are basically advanced bar codes that will identify not only what the product is, but also, using RFID technology, will include data on characteristics of the individual products or cases, like where a product is manufactured, when it is shipped to its destination point and when it leaves the store.
Retailers believe the advanced technology will offer greater visibility into monitoring product inventory as it travels through the supply chain. “It is imperative that we have the merchandise the customer wants to buy when they want to buy it,” said Linda Dillman, executive vice president and chief information officer of Wal-Mart. “We believe RFID technology is going to help us do that more often and more efficiently.”
As Wal-Mart explains it, passive RFID chips, embedded in EPCs, will be read when a tagged case or pallet passes near a reader at its dock doors, and the data will be transmitted to an inventory control system. Wal-Mart said its readers have an average range of 15 feet.
In addition to the case and pallet tagging, Wal-Mart said certain individual products will be tagged in the trial. Several Hewlett-Packard electronic products, for example, will be tagged at the item level.
This more futuristic use of the technology has enraged consumer privacy groups, like Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN), which has launched protests against the technology, focused mainly on item-level tagging of goods.
Item-level tagging will mean each product on the shelf will be equipped with its own EPC, which will likely be read as it leaves the store, and then perhaps attached to the purchaser’s identity if a credit card or supermarket loyalty card is used. CASPIAN admits the same thing currently happens with bar codes, but that doesn’t validate the technology.
“If nothing is done to stop it, the same will happen with the unique RFID numbers on products,” commented Katherine Albrecht, founder and director of CASPIAN. “This means that if retailers can read an RFID tag on a product they previously sold you, they can identify you as you walk in the door and even pinpoint your location in their store as you shop.”
Not exactly, said Mike Sheriff, president and chief executive officer of AirGate Technologies Inc., which designs and develops applications for RFID deployments. According to Sheriff, there is a lack of understanding surrounding the capabilities of RFID.
Sheriff noted that the short-range nature of readers, along with the fact that supply-chain applications use passive, not active tags-so although data can be gathered by readers, the tags cannot send information on their own-contribute to limiting the privacy risks. Also, he pointed out that RFID has nothing to do with global positioning system technology, which enables locations to be pinpointed, and he said typical 96-bit RFID tags are capable of storing only small amounts of information.
Sheriff referred to EPCs as “bar codes on steroids,” explaining that while they offer retailers more information about their inventory and its journey along the supply chain, from a consumer standpoint, they function basically the same as a UPC bar code. “I have yet to see what the furor is with RFID as it’s going to be used in the supply chain,” said Sheriff.
EPCglobal, a standards body helping companies to deploy EPCs, has adopted guidelines for use by companies using the technology. Under those guidelines:
c Consumers should be notified of the presence of EPCs on products with EPC logos;
c Consumers should be informed that they can discard, disable or remove EPC tags from products they purchase;
c Consumers should be able to access information on EPCs and their applications and advances in the technology easily;
c Companies should use, maintain and protect records gathered from EPCs in compliance with the law and should publish their policies regarding the retention, use and protection of any consumer-specific data generated through EPCs.
Indeed, beyond the supply chain, RFID technology seems to pose more potential risks. Sheriff recalled one application in which children at a water park are equipped with RFID tags so their parents can locate them while they are in the park. Other applications include putting RFID tags in driver licenses and passports so those using them can be correctly identified. The question for such applications is whether the benefits outweigh the risks.
And Wal-Mart too, while disputing current privacy concerns, leaves its future plans open to debate. “In the foreseeable future, there won’t even be any RFID readers on our stores’ main sales floors,” said Dillman. “However, down the road there are so many possibilities to improve the shopping experience that we hope customers will actually share our enthusiasm about EPCs.”
