RFID

What it means

RFID, radio-frequency identification, reads data from a chip on goods, pallets or cards without contact, using radio waves. Unlike a barcode, there is no need to aim a scanner at each item; a reader can capture dozens or hundreds of tags at once, even inside a box.

A tag contains a chip and an antenna; passive tags have no battery and are powered by the reader's signal. Passive RFID is used in retail and logistics, active battery-powered tags for tracking containers or vehicles over longer distances. Access cards and contactless payments work on the same principle.

RFID complements or replaces the EAN barcode where speed and accuracy matter. It speeds up stocktaking, goods receipt and dispatch, and tracking movements along the supply chain.

How it works in practice

In fashion retail, RFID allows a stocktake of the whole store in minutes rather than hours and precise knowledge of what is in the back room and what is on the shop floor. In a warehouse management system, reading pallets at receipt and dispatch becomes faster and less error-prone.

Implementation requires tags, readers, integration with stock records and process changes. On cheap goods the cost of tags eats into margin, so RFID often starts with higher-value items, pallets or returnable packaging.

For accounting it means more accurate inventory data and smaller stocktaking differences. Fast counts make it possible to count more often, which improves control over shrinkage and theft and simplifies the year-end close.

What to watch out for

Metals and liquids interfere with radio signals and affect reading. Before rollout, the system must be tested in real warehouse conditions with real goods, otherwise the data will be incomplete and trust in the system will fall.

If RFID is used on goods consumers take home or on employee cards, personal data processing may be involved. Think through what data the tag holds, who can read it and whether the tag is deactivated after sale.