Fact Check

WalMart Using RFID Tagging

Is Wal-Mart trying out products embedded with RFID tracking chips?

Published Jun 15, 2003


Claim:   Wal-Mart is trying out products embedded with RFID tracking chips.


Example:   [Starrett, 2003]


Starting this week, the nation's largest discount retailer will quietly begin selling tracking-chipped products to clueless shoppers. The first volley in their war against our privacy is set to start at their Brockton, Massachusetts store.

Wal-Mart will put Radio Frequency I.D. sensors on shelves stocked with RFID-tagged Gillette products, but they'd rather you didn't know about it, because, hey, you might not like it, and then you might make noise and then they'd have a big PR mess on their hands.

You might even stop buying Gillette products or, say, refuse to shop at Wal-Mart.

These chips, researched at M.I.T.'s Auto-ID Center are about the size of a grain of sand. Chipsters say the technology will only be used to help retailers keep track of inventory — like bar codes. But privacy-loving consumers question the very concept of a device that sends out radio waves to "readers" that not only identify the article, but where and with whom it's going.

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Origins:   One of the keys to the success of giant retailing chains such as Wal-Mart has been the advancement of information technology which allows for tight control of inventory. The ability to quickly and accurately track the movement of product through their stores enables retailers to ensure that customers don't find a wanted item out of stock, while avoiding the spoilage and costly inefficiencies that come with keeping too much unsold inventory on hand. These improvements lower retailers' operating costs, and the savings are (theoretically) passed along to consumers in the form of lower


The adoption of the Universal Product Code, or UPC (more commonly known as the "bar code"), in the 1970s was one of the most significant steps in automating the tracking of inventory. With every product assigned a unique code (encoded in bar form on the packaging) which could be read by a scanner and matched up with information stored in a database, retailers could eliminate the costly and time-consuming processes of individually price-tagging every single item and manually counting items to determine the amount of inventory on hand; instead, prices could be read by scanners at the point of sale, and purchases could be tracked automatically and the number of items sold subtracted from stock-on-hand to calculate current inventory levels.

A more recent advance in inventory control has been the development of Radio Frequency Identification (RFID) technology. Described as "bar codes on steroids," tiny RFID chips are being embedded in products (or their packaging) to assist retailers with Automatic Identification and Data Capture (AIDC). The RFID chips, when triggered by sensors, emit short bursts of identifying data streamed via radio waves; this system is a significant improvement over bar coding system for a number of reasons, including:

  • RFID chips can store much more information than bar codes.
  • RFID chips are a read/write technology, so more information can be added to them as needed.
  • RFID chips don't require line-of-sight proximity (i.e., the information they store can be read even when products are still encased in boxes or crates).
  • RFID chips are more robust (i.e., not subject to problems caused by tearing, creasing, or alteration) than bar coding.

Most important, perhaps, RFID chips can enable the tracking of individual pieces of merchandise. That is, rather than simply identifying an item as a box of Cheerios (as bar codes do), an RFID chip can uniquely identify a particular box of Cheerios and enable it to be tracked all the way through the sales chain, from the warehouse to a consumer's shopping cart. This level of uniqueness in tracking can, for example, aid in the removal of expired merchandise from store shelves or assist in locating items designated as part of a product recall.

The announcement in June 2003 that Gillette would be trying out some of their RFID-tagged products (such as batteries, razors, oral care products) in cooperation with a Brockton, Massachusetts, Wal-Mart prompted the article by Mary Starrett quoted above, a dire "Big Brother" warning insinuating that RFID tags would not necessarily be disabled at the point of purchase and could be used to track items even after consumers had purchased them and taken them home. Ms. Starrett also suggested that the Brockton store was chosen for this experiment because "the store's customers are typically lower income minorities who'd be less likely to be aware of the tracking devices, and even less likely to make a fuss about them."

(RFID tags have no built-in batteries or power supplies; they're activated by radio waves sent out from RFID readers which emit just enough power to trigger the tags and have a limited range limit, so Orwellian nightmare scenarios involving avaricious corporations tracking the locations of every one of their products all over the globe are not yet a reality.)

The wireless inventory control system trial referenced in this particular 2003 warning did not take place. On 9 July 2003, CNET news reported that Wal-Mart had canceled it:

"The shelf was never completely installed," Wal-Mart spokesman Tom Williams said. "We didn't want it. Any materials that were there (in Brockton) were removed. We never had products with chips in them."

In July 2010, news accounts stated that Wal-Mart would soon be placing removable RFID "smart tags" on individual garments such as jeans and underwear in order to optimize stocking and inventory control procedures (and, if the results were promising, the company would eventually roll out RFID-tagging with other products as well). Privacy advocates responded by again raising concerns that the RFID technology could be used not just for inventory purposes, but for intrusive customer-tracking activities:

While the tags can be removed from clothing and packages, they can't be turned off, and they are trackable. Some privacy advocates hypothesize that unscrupulous marketers or criminals will be able to drive by consumers' homes and scan their garbage to discover what they have recently bought.

They also worry that retailers will be able to scan customers who carry new types of personal ID cards as they walk through a store, without their knowledge. Several states, including Washington and New York, have begun issuing enhanced driver's licenses that contain radio- frequency tags with unique ID numbers, to make border crossings easier for frequent travelers. Some privacy advocates contend that retailers could theoretically scan people with such licenses as they make purchases, combine the info with their credit card data, and then know the person's identity the next time they stepped into the store.

Wal-Mart tried to allay fears by noting that it was notifying customers about the RFID tags, that the tags would be easily removable, and that the tags themselves contain no personally identifying information:

Wal-Mart is demanding that suppliers add the tags to removable labels or packaging instead of embedding them in clothes, to minimize fears that they could be used to track people's movements. It also is posting signs informing customers about the tags.

"Concerns about privacy are valid, but in this instance, the benefits far outweigh any concerns," says Sanjay Sarma, a professor at the Massachusetts Institute of Technology. "The tags don't have any personal information. They are essentially barcodes with serial numbers attached. And you can easily remove them."

Additional Information:

Consumers Against Supermarket Privacy Invasion and Numbering
Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN)

Last updated:   25 July 2010


    Bustillo, Miguel.   "Wal-Mart Radio Tags to Track Clothing."

    The Wall Street Journal.   23 July 2010.

    Gaither, Chris.   "Tiny Tracking Chips Surface in Retail Use."

    The Boston Globe.   9 June 2003.

    Shim, Richard.   "Wal-Mart to Throw Its Weight Behind RFID."

    CNET News.com.   5 June 2003.

    Shim, Richard and Alorie Gilbert.   "Wal-Mart Cancels 'Smart Shelf' Trial."

    CNET News.com.   9 July 2003.

David Mikkelson founded the site now known as snopes.com back in 1994.

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