The answers to your questions depend on the particular type of RFID system you are using.
Passive RFID solutions typically indicate only that a tag is within an interrogator’s read range. Passive low-frequency (LF) and high-frequency (HF) systems have a read range of approximately 3 feet, so if you were to read a tag, you could know that it was within 3 feet of that particular interrogator (each reader has its own identity, so you could associate one with a specific location).
Passive ultrahigh-frequency (UHF) systems, on the other hand, have a read range of up to 25 to 30 feet, under ideal conditions, so you could know that a tag was within that distance of a reader. There are UHF solutions that employ phased-array antennas to extend the read range to 300 feet or more, and these systems can locate a tag to within about 10 feet.
Active RFID systems broadcast a signal and have a longer read range—typically, 300 feet or more. Some systems indicate only that an active tag is within range of a reader, but real-time location system (RTLS) technology utilizes tags that beacon at regular intervals. RTLS solutions use a variety of techniques to enable software to calculate a tag’s location, and most can locate a tagged object to within 10 feet. Ultra-wideband (UWB) systems can achieve a greater level of accuracy—usually to within a few inches.
The question of failure rate is a little vague. A tag might not operate if defective, or if its battery had died. Another aspect is how often the tag failed to be read despite being functional. Generally speaking, tag failure is rare.
Passive tags are usually tested prior to application. They can be damaged when applied, however. Banging a chip might render it inoperable, while zapping a tag with electricity might blow its circuits. For the most part, tags are not likely to simply die on their own. Active tags can also be damaged due to banging or shocking, but the greatest source of failure is a dead battery. Most systems issue an alert when low on power, so that the battery or tag can be replaced.
—Mark Roberti, Founder and Editor, RFID Journal