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Sam's Club Provides Clarity on EPC RFID Plans

The retailer has sent a letter to all of its suppliers stating it is committed to the EPC RFID tagging of sellable units, but that suppliers will have more time to meet its tagging requirements.
By Mark Roberti
Jan 19, 2009Sam's Club, the warehouse retail division of Wal-Mart Stores, has sent a letter to its suppliers clarifying its plans to use radio frequency identification tags based on Electronic Product Code (EPC) standards to track pallets and sellable units.

The letter, dated Jan. 15, 2009, and signed by Sam's Club's CEO, Doug McMillon, indicates the retailer "remains committed to the vision of 100 percent EPC RFID labeling on sellable units," and that the initiative will deliver "game-changing services and value" to club members, while also delivering value to suppliers. It spells out Sam's Club's plans for implementing EPC RFID technology, and provides suppliers with additional time to comply with the tagging requirements at both the pallet and sellable-unit level.

Twelve months ago, Sam's Club had sent all of its suppliers a previous letter spelling out the deadlines by which it wanted them to apply tags to pallets and sellable units, and specifying service fees (up to $3 per pallet) that Sam's would charge for each pallet or sellable unit it received without a tag. The purpose of the fee was to cover Sam's Club's cost in having to tag the pallets or sellable units itself (see Sam's Club Tells Suppliers to Tag or Pay).

That earlier letter had indicated that by Jan. 31, 2008, every full single-item pallet shipped to its distribution center in DeSoto, Texas, had to bear an EPC Gen 2 RFID tag, and that by Jan. 30, 2009, all full single-item pallets shipped to any of Sam's Club's 22 DCs must be tagged. In addition, the previous letter stated that suppliers would be required to begin tagging sellable units bound for the Desoto DC by Oct. 31, 2009. The new letter lowers the service fee to only 12 cents per pallet, and notes that the tagging requirement will apply only to pallets sent to the DeSoto location this year, as well as the clubs served by that DC. Pallet-level tagging is expected to be rolled out chain-wide in 2010. According to last week's letter, the deadline for tagging sellable units is "under review."

"We are forging ahead with our sellable-unit-level labeling, and examining how we can enhance club members' experience at the register," Simon Langford, Wal-Mart's director of EPC and RFID technologies, told RFID Journal. "We are working on a proof-of-concept for an EPC-enabled register, and when we have completed that work, we will give our suppliers ample time to ramp up to full sellable-unit tagging."

Sam's Club is not yet ready to announce when the proof-of-concept trials for the EPC-enabled checkout register will commence, or when that work is likely to be completed. When the company has more information, Langford says, it will communicate that with the supplier base, then give suppliers 12 to 18 months to prepare and implement sellable-unit tagging.

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