What Does It Take to Use RFID for Loss Prevention?

How can I utilize the technology for more than just inventory accuracy?

—Stacie

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Stacie,

To employ RFID tags on items for the purpose of loss prevention, you would need to put readers at the exits of your store. There are overhead, gate and floor-mat readers designed for this purpose. You would also require a system at the point of sale (POS) to read each tag and confirm that every item has been paid for. When a customer paid for an item at the POS, the store's database of items would be updated to indicate the product had been sold. That information would then be accessed by the reader at the exit.

When a tag passing out of the store was read, the system would quickly look up its status and know not to sound an alarm if the item was sold. GS1 has released a paper discussing the implementation of passive UHF RFID tags for electronic article surveillance (EAS) applications, which you can access here.

Some companies have experimented with smart shelves for high-theft items. The most common application is to tag high-theft items and have a smart shelf reader constantly read the tags. If unusual activity were detected—say, if someone were to pick up 10 items when typical sales are one or two—a message would be sent to a security guard to investigate. Some high-end retailers have also developed systems that issue alerts if specific items, such as a $5,000 handbag, are picked up from a shelf.

The real value of RFID, in my view, is that it tells you what was stolen so that the product can be replenished. It also provides data that allows companies to investigate how and where theft is occurring. For example, if you know items are going out a specific exit at certain times of the day, a security guard can be positioned at that exit during those spans of time in order to deter theft.

American Apparel found that RFID helped it to reduce internal shrink by as much as 75 percent at some of its stores (see RFID Delivers Unexpected Benefits at American Apparel). Stacy Shulman, who was the retailer's VP of technology in 2011, told me that a cultural change occurs when you deploy RFID. Because you are tracking individual items, staff members realize each item has value and are thus less likely to take something, thinking the company will never miss it or care that it's gone.

—Mark Roberti, Founder and Editor, RFID Journal