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Why is Wal-mart using RFID

RFID stands for Radio Frequency Identification and is a term that will become increasingly well known as usage of the new technology becomes pervasive. There is no question that the tiny chips, which enable tracking of physical goods from the assembly line to warehouse to retail outlet to check stand will replace the barcodes previously used for that purpose. Some RFID chips are tiny, they are nearly indistinguishable from dust in many cases.

Wal-Mart is now requiring their 100 largest suppliers to use RFID tags at the pallet level. Meaning that those tags are currently in use to identify and track groups of products as they arrive at the Wal-Mart warehouse up until shelving at the giant retailer. Some products, such as Gillette razors, had been testing individual item tracking up until final sale and removal from the Wal-Mart store. Privacy advocates slowed that practice by launching a boycott of Gillette.

More and more giant retailers like Wal-mart are requiring suppliers to use RFID technology. The German chain Metro Group, which operates 2300 stores in Europe and Asia has demanded the same of their suppliers. Metro Group has gone even further with RFID to operate what they call the "Store of the future" where shoppers needn't remove items from shopping carts to pay for them. They simply pass by RFID readers and all items will be tallied and paid for. Metro stores provide RFID tagged "loyalty cards" to consumers that identifies those shoppers by reading within purses and wallets as those consumers enter and leave any of the 2300 Metro stores.