UK: RFID Tags – Overcoming The Fears Of Big Brother

Last Updated: 6 October 2003
Article by Dan Guildford

An electronic revolution set to transform retail stock control and customer profiling has sparked consumer controversy with fears that information gathering may not stop at the shop door.

The debate over the use of radio tagging as a successor to barcodes to electronically track retail goods has intensified in both the UK and the US since some major supermarkets introduced pilot tag schemes.

The benefits to retailers could be enormous. Tags offer increased operating efficiency and reductions in shrinkage – it will be harder for goods to "walk". But privacy campaigners are concerned tags could be used for more sinister purposes, such as monitoring the whereabouts of customers and building profiles of customers' shopping preferences – without their knowledge.

Radio Frequency Identification (RFID), tiny devices that can be fitted to any goods, comprise a microchip and an antenna, capable of transmitting messages to "readers". The readers use the message in accordance with their programmers' instructions. Generally, readers can only be a couple of metres or so away from the tags, although some experts believe more powerful versions capable of reading information at greater distances can be built. Unlike barcodes, RFID tags do not require line-of-sight reading, which means a shopping trolley full of RFID-tagged goods could be read in a second.

Another major advantage of RFID tags over barcodes is that each item will have its own code rather than a generic code which relates to a specific product line. This means retailers can trace and recall certain batches of goods quickly should there be any subsequent concern over their quality or safety.

At present, the tags are too expensive to use on low-cost items, although their cost will fall over time.

Pilot Schemes

In July, Tesco trialed RFID technology in its Cambridge store on Gillette Mach 3 razor blades, emphasising that this was to garner stock information. However, Tesco had noticed that the blades were particularly susceptible to theft. They used the RFID tagging technology to trigger a CCTV camera picture as the customer picked a packet of razor blades off the shelf and then compared this with a second picture taken at the checkout. The store manager was able to identify possible shoplifters and present the pictures to the police. The trial concluded in August and Tesco's verdict on its success is awaited. Quite what happens when a customer decides against the purchase before reaching the checkout and puts the product back on to a different shelf is unclear.

In the Sandhurst branch of Tescos the DVD section made use of "intelligent shelving". When a customer picked up an RFID-tagged DVD from the shelf, the shelf sensed this and immediately sent a message to the main stock computer to replenish the shelf stock.

In one store in Germany, retailers Metro AG have taken this a step further. A combination of loyalty cards and "smart" shopping trolleys monitor the customers' shopping habits whilst they shop and use the information immediately to highlight to customers other products or offers which they may find appealing.

In the US, Wal-Mart has run a pilot scheme and is now introducing requirements for its suppliers to attach RFID tags to palettes and cases of goods (although not on the goods themselves), for use in warehouses and distribution centres.

The Supply Chain Management Advantages

Without doubt, RFID tags can provide huge economic benefits for businesses. For example:

  • The technology can be used to track batches of products right through the supply chain. This information will be invaluable in enabling retailers to keep inventory levels low and prevent valuable warehouse space being cluttered with excess stock.
  • The "smart shelf" technology captures the movement of goods and automatically triggers requests for a fresh supply before goods go through the checkout.
  • There should be a reduction in the amount of time taken at the checkout by scanning a trolley full of goods instantaneously, helping to restrict queues.
  • RFID tags also provide stores with the opportunity to prevent shoplifting.

The Privacy Issues

It is easy to see why suppliers are increasingly keen to introduce RFID tags to the marketplace and customers might share this enthusiasm if costs saved by the suppliers and retailers were passed on to them in the form of cheaper products.

Privacy groups, however, have raised a number of legitimate concerns over the use of RFID tags, which suppliers, retailers and Government need to address before tags are accepted by the public, such as:

  • The Metro AG example shows how the technology can be used to build profiles of customers' shopping habits as they shop. What is done to protect this data from being mis-used or being passed on to third parties against the wishes of the customer is key.
  • The technology enables products to be tracked, but the customer may object to the tracking continuing once he or she has left the store. How can the customer be assured that their home is not full of tracking devices, enabling their habits to be monitored for various market research and other purposes?
  • It is not inconceivable that criminals could use RFID tag readers to scan properties (e.g. a house or a car) for RFID tags to see whether the property contained any valuable goods before deciding whether or not to break in.

Tom Watson, a Labour MP, has submitted a motion for a parliamentary debate this Autumn on the regulation of RFID tags, with a view to introducing legislation to address these concerns. Without these, he warns that the tags are "open to abuse by unscrupulous retailers".

Dealing with the privacy issues

Although existing legislation could be used to deal with some aspects of RFID tags (such as the Data Protection Act 1998 and the E-Privacy Directive), we may need further legislation from the UK or Europe to deal with specific issues. In the meantime, suppliers and retailers thinking of introducing RFID tags should consider:

  • Reducing customer scepticism by promoting a public awareness campaign explaining what RFID tags are, and how they are (and as importantly, are not) to be used. This could be promoted alongside an RFID Tag Policy, which provides the customers with all of the information they require.
  • The use of RFID tags to build a customer profile can be likened to a customer loyalty card scheme. As with loyalty cards, the consent of a customer must first be obtained before such information can be collected and processed. Therefore, the customer will need to sign up to a Fair Collection Notice explaining who is collecting the data, the purposes for which the tags are to be used, which third parties the data will be disclosed to, and who the customer should contact if they have any issues regarding the data. Where no consent is obtained, there can be no monitoring for these purposes.
  • If the information is being stored to build a customer profile, the retailer or supplier must observe their obligations under the Data Protection Act 1998, such as keeping the data secure, accurate, relevant and up to date.
  • If the customer does not want the tracking to continue once they have left the store, then there should be an option to disable the RFID tags at the checkout by erasing the data on it. Philips announced that it had added an "off switch" to its RFID tags. Retailers could simply disable tags as a matter of course, having no further legitimate interest in monitoring what happens to the products once they leave the store.
  • Where the customer consents to tracking continuing outside the store, the products carrying RFID tags could be highlighted on the receipt so that the customer can identify them easily.
  • The Information Commissioner has already produced guidelines on the use of CCTV for the prevention of crime. Retailers using RFID tags for similar purposes to the Tesco / Gillette example should ensure that they comply with this guidance.
  • Arguably, the RFID tags should be placed on the product packaging, rather than the products themselves so that they are obvious to the customer. The customer could then to dispose of the tags easily. However, this may affect the usefulness of the tags in avoiding shrinkage, if shoplifters find it easy to remove the tags before stealing the products.

If RFID tags are to assist suppliers and retailers, the doubts of customers must first be removed and the advice given here may go some way to dispelling such doubts.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.