Radio Frequency Identification Technology

Retail Council position

Oppose measures restricting the research, development, and implementation of radio frequency identification (RFID) technology - a tool promising operational and supply chain efficiencies, effective loss prevention applications, and, ultimately, benefits to consumers.  Industries ranging from retail to pharmaceutical manufacturing to state and local government all find RFID, still in its infancy, an important part of plans for future growth.

Support legislation creating a study commission on RFID that would include participation from the retail industry and other business stakeholders.  Such commission would be designed to examine carefully and thoroughly all aspects of the emerging technology - including its many benefits - to ensure that future developments are neither stifled by unnecessary prohibitions nor abuses of consumer privacy.

Legislative action

During the 2007 Session, the Assembly Consumer Affairs and Protection Committee held two bills opposed by the Retail Council that would restrict development and use of RFID (A.222 and A.261). 

The Assembly approved Retail Council-supported legislation establishing a radio frequency identification technology task force (A.225-B).  Its Senate companion was reported to the Senate Finance Committee, but was not passed by the full Senate (S.165-B) during the regularly-scheduled 2007 Session. 

At a glance

• Radio frequency identification technology is instrumental in improving supply chain management for retailers and other entities throughout the world.  According to the Retail Industry Leaders Association, deficiencies in this complex supply chain process result in a loss of $180 billion per year.  RFID technology has the potential to decrease this figure dramatically by improving supply chain efficiency, transparency and management.
• RFID tags are affixed to goods before entering the distribution chain and contain only product information that will be used by authorized loss prevention personnel through computer software that is properly secured and encrypted.  RFID tags do not contain the personal information of individual consumers. 
• RFID is regulated by industry standards that change with improvements and additions to the technology.  The foundation for these guidelines continues to be consumer privacy—with the understanding that retailers will not embrace any tool in their business model that may compromise their customers’ personal information.
• This new technology can benefit the consumer by improving inventory management, which will in turn reduce instances of out-of-stock merchandise.  In addition, RFID will expedite the process for transactions involving a return, exchange and/or product recalls.