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Sam's Club Letter Outlines Changes to RFID Requirements

Sam's Club informed suppliers about major changes to its RFID program. Pallet tagging is still required, but the deadline has been extended from January 30, 2009 to 2010, and non-compliance fees were sharply reduced. The sellable-unit tagging deadline has been postponed indefinitely, and case tagging is now optional.
Jan 26, 2009This article was originally published by RFID Update.

January 26, 2009—Sam's Club has significantly changed its RFID tagging requirements for suppliers. Pallets shipped to the retailer still require an RFID tag, but case-level tagging has been made optional and the requirement for sellable-unit (item level) tagging has been postponed indefinitely. The new requirements and other updates about Sam's Club's RFID activity were communicated to suppliers in a letter dated January 15, 2009.

Sam's Club also slashed the service fee charged to suppliers who don't apply pallet labels from $3 to 12¢. The service fee reduction only applies to shipments to the DeSoto, Texas distribution center. It is unclear whether any fee will be assessed for non-tagged shipments to other DCs.

The new terms reduce the RFID tagging requirements that Sam's Club established last January. At the time, Sam's Club sent suppliers a letter that called for all pallets shipped to 22 distribution centers to be tagged by the end of January 2009, all cases to be tagged by November 2009, and for products to be tagged at the sellable-unit level by November 2010. Now, case tagging is "optional" and the sellable-unit tagging timetable is "under review," with new deadlines to be communicated to suppliers in the future, according to the letter.

The table below shows the current requirements and those communicated last year.

Requirements Previous
(per 1/7/08 letter)
(per 1/15/09 letter)
All pallets tagged January 30, 2009 2010*
All cases tagged October 31, 2009 Optional
All sellable units tagged October 31, 2010 To be determined
* The letter does not provide a specific date but says Sam's Club will "...prepare for a chain-wide rollout of pallet level labeling in 2010."

Case-level tagging was made optional because Sam's Club believes sellable-unit tagging provides more benefit, according to the letter, which said suppliers need 12 to 18 months to prepare for sellable-unit tagging and that a new timetable would be established accordingly.

The letter also provided an update on Sam's Club's RFID efforts. Highlights include:
  • All retail locations are RFID enabled at the receiving doors, sales floor transition areas and box crushers;
  • Forklift-mounted RFID reader testing will be expanded to all retail locations serviced by the DeSoto distribution center within 90 days;
  • RFID read data is available to suppliers through the Retail Link website;
  • In-stock and feature tracking applications are being refined;
  • RFID-enabled point-of-sale (POS) systems are in development;
  • A new Supplier Council was formed to help establish supplier cost/benefit models for tagging at the pallet and sellable-unit levels.
Neither Sam's Club nor parent company Wal-Mart responded to RFID Update's request for comment. No announcement of the new fee schedule or tagging timetables is on either company's website. There is an online FAQ document for suppliers about RFID, but it makes no mention of tagging requirements. A separate online document that outlines general supplier requirements does not reference RFID at all. RFID Update obtained the new supplier requirements letter from standards body EPCglobal's website, where it is publicly accessible.

For background about the RFID requirements Sam's Club announced last year, see:
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