Sam's Club Reduces Tagging Fee

By Mark Roberti

Jan. 19, 2009—Sam's Club, the warehouse retail division of Wal-Mart Stores, has informed suppliers, in a letter sent last week, that it has reduced the fee for each pallet it receives without a radio frequency identification tag. The retailer will now charge 12 cents, instead of the previously announced $2.50, to place an RFID tag based on Electronic Product Code (EPC) standards on any pallet shipped to its distribution center in DeSoto, Texas.

The reason for the service fee reduction, according to Simon Langford, Wal-Mart's director for EPC and RFID technologies, is that the retailer has integrated EPC RFID tagging into its own operations, so the cost to Sam's Club is minimal. The firm has also announced that it will give suppliers additional time to comply with the tagging requirements (see Sam's Club Provides Clarity on EPC RFID Plans).

In a previous letter sent in January 2008, Sam's Club had told suppliers they would be required to tag pallets shipped to its DeSoto DC starting at the end of that month, and that they would initially be charged a service fee of $2 per untagged pallet, with that fee rising to $3 by the beginning of this year. The charge was intended to cover Sam's Club's labor and tag costs (see Sam's Club Tells Suppliers to Tag or Pay). But during 2008, Sam's integrated EPC RFID tagging with its existing process, thereby greatly reducing the costs involved.

When pallets arrive at any of its 22 DCs, Sam's Club places a label with a bar code and human-readable information on each one (in addition to the shipping label applied by the supplier) so it can track the pallets as they are shipped to and moved within the clubs. When it first began tracking pallets with EPC RFID, both a bar-code label and an EPC RFID tag were affixed to the pallets.