As RFID becomes more widely used across different industries, we’re seeing new applications of RFID technology in retail, from inventory control to loss prevention. Today we’ll go over the basics of RFID and how it can be used in the retail space to help reduce shrink.

What is RFID?

RFID, or “radio frequency identification,” has been around for much longer than some people realize. The technology that led to RFID was first developed during World War II for espionage and communication. A few decades later, true RFID was born with the invention of a passive radio transponder with memory in 1973. However, it wasn’t until the end of the 1990s that RFID was applied in the retail environment.

That’s what distinguishes RFID from electronic article surveillance (EAS) technology: RFID tags can store data, while EAS tags cannot. So how exactly does an RFID tag work?

How RFID Works

RFID consists of an RFID reader and a tag with an RFID chip and antenna. The reader sends out a radio frequency signal and waits for a response from any tags in range. In retail, these tags are typically passive, require no battery, and are powered by the radio frequency signal sent by the reader.

Unlike traditional EAS antennas, an RFID reader comes in many different shapes sizes, and mounting options. This allows for better reading of RFID tags through product packaging, inside a shopping cart, or even through clothing, which speeds up the reading process.

Like I mentioned earlier, an RFID tag contains information, compared to traditional EAS tags which can only respond to an EAS antenna’s signal. By storing data inside an RFID tag, you will always know where a specific asset is, which is a great benefit for both inventory control and asset protection.

RFID in Retail

The data and communications capabilities of RFID makes it a widely applicable technology in retail. Here are some of the ways RFID can improve your current loss prevention strategy:

Loss Prevention

Retailers who implement RFID in their store locations have seen shrink decrease by as much as 55 percent. RFID tags and systems can act in the same role as traditional EAS tags and systems while providing much more information to the retailer. For example, if an asset with an RFID tag leaves the store without being deactivated, not only will the tag trigger the alarm, but employees can see exactly which product left the store, making it easier for them to ensure all the missing items are recovered or potentially replenished.

Merchandise Visibility

RFID can also improve shrink visibility across the store. By tagging your merchandise with RFID tags and labels and installing RFID readers throughout your store (or using a handheld device), you can have full visibility of the store floor, the stock room and each sales transaction. RFID technology can help you reduce shrink in high-theft departments, from electronics and luxury goods to meat and baby formula, by tracking merchandise and ensuring it is legitimately purchased before it leaves the store.

Future-Ready

Even if your main reason for installing RFID technology in your store is to make your loss prevention system smarter, you are opening yourself up to the possibilities of future applications of RFID in retail. For example, RFID can be easily integrated with your point-of-sale (POS) and inventory control systems to give you complete visibility of your merchandise.

Why Choose RFID?

Compared to traditional EAS systems, RFID is a true communications technology. This offers you many more options beyond an alarm. However, RFID systems can be complex, requiring more planning and investment than EAS.

Below are some of the pros and cons of an RFID loss prevention system:

Smarter Than Traditional EAS

RFID offers smarter asset protection than traditional EAS systems. By using RFID technology in your loss prevention system, you can have a wider detection range while remaining unaffected by the metal or electronic interference that causes false alarms in EAS systems.

Aesthetically Pleasing

Because RFID systems are a newer technology, they offer more flexibility in design and installation options. Many RFID systems are available in unobtrusive designs, such as overhead or concealed form factors. These discreet design options are great for retailers who want the security of a loss prevention system without distracting from their store displays.

Not One Size Fits All

While the best way to optimize your loss prevention system is to tailor it to the unique needs of your store, many retailers prefer a simple EAS system so they can “set it and forget it.” Because RFID is more than just an alarm system, it works best when integrated with other systems to give you a full view of every item in your store.

Greater Investment

Because RFID is not as well established in the retail loss prevention industry as EAS, there are fewer manufacturers and solution providers who specialize in this technology. However, many EAS systems can be upgraded with RFID technology, which is an option for retailers who want the benefits of RFID without the costs of installing new systems in their stores.

RFID has come a long way since it was first invented several decades ago. With more manufacturers and solution providers recognizing the value of RFID technology, it has become more widely available to retailers of any size, not just nationwide chains. While installing an RFID system in your store often calls for a greater investment, the capabilities of RFID go far beyond loss prevention, making it a future-ready solution for many areas of retail.