How Does RFID Technology in Retail Work?

How Does RFID Technology in Retail Work?

While technology has changed many aspects of the retail environment, it continues to be a sector that is constantly evolving, and RFID technology is catching up also in this environment. 

In this article, we will focus on how RFID plays a beneficial role in the retail sector. We will explain what it is, how it works, and how RFID can benefit the retail industry. 

What is RFID, and How Does It Work?

Radio Frequency Identification (RFID) refers to a wireless system comprising two components: tags and readers. The reader is a device that has one or more antennas that emit radio waves and receive signals back from the RFID tag. Tags which use radio waves to communicate their identity and other information to nearby readers can be passive or active. Passive RFID tags get powered by the reader and do not have a battery, while active RFID tags get powered by batteries.

RFID Technology - Improving Customer Satisfaction - Spectos

RFID tags can store a range of information from one serial number to several pages of data. Readers can be carried by hand or mounted on a post or overhead. Readers built into the architecture of a cabinet, room, or building.

RFID technology works by sending radio signals between a reader and an RFID tag. The reader transmits a radio signal, and when any RFID tag comes within range, it receives the signal and sends feedback that enables the reader to identify it and receive other data that it contains. As each RFID tag has its unique code, readers can track and communicate with multiple RFID tags. RFID readers come in two forms, either as handheld scanners or fixed readers. 


Retailers need accurate inventories, real-time merchandise location, and enhanced security. RFID is considered the upgrade for barcodes and the future of point of sales (POS) because of its potential in improving stock control and supply chain management. RFID tags are capable of storing large amounts of information about a product – date of manufacture, date of shipping, serial number, size, price, color, and so on. Therefore, once an RFID tag gets scanned at your POS terminal, the central computer immediately knows everything about that item. With RFID, stock information gets updated in real-time, items are replaced on the shelf more quickly, and if stocks are low, it can even be programmed to trigger an order to the supplier.

Now let us take a look at some of the benefits of RFID to retail.


1. Efficient Inventory Management: 

The use of RFIDs allows retailers have stock information at their fingertips in real-time. Through automated scanning of items in the warehouse, you have an efficient record of goods sold and the quantities of remaining products. Invariably, labor costs get reduced as there is no need for employees to check items physically.

2. Supply Chain Management: 

RFID improves product visibility by enabling retailers to have a real-time location of pallets, containers, giving them increased control over the supply chain. By installing automated scanning items at the entry or exit point in the warehouse to read tags on shipped items and delivery vehicles, retailers have a better grasp of the stock shipped out or products sold, making warehousing processes much quicker and efficient in doing.

3. Asset Tracking: 

RFID is very efficient in Asset Tracking to track assets that are frequently moved and often misplaced. Movable assets with RFID tags get visibility in real-time and also aids with fast and efficient periodic stock taking.

4. Interactive Product Advertising: 

RFID technology is beneficial for in-store and external advertising. With the RFID tags on in-store products, interested visitors can access them by simply swiping their mobile phones over the RFID tags. Details of the product get sent to their phone, or a web page opens up on their browser. RFID for this purpose potentially increases the sales of products.

5. Automated Checkouts and Cashless Payment: 

One of the fascinating applications of RFID is the automatic checkout process and cashless payments. There are three checkout methods you as a Retailer can adopt.

  • Customers can have an app on their mobile phones to log their purchases by scanning the items and then pay automatically through their mobile wallets.
  • The items in the shopping cart get scanned instantly when the shopping cart passes through the checkout counter. To make a payment, customers can swipe their cards or use their mobile wallets.
  • Have an RFID self-service kiosk where customers can scan their items and pay for their purchases using their cards.

6. Security

RFID, as a security application, serves two purposes – Protection against theft and Access Control. For Protection against theft, tag the company’s equipment and stock, and if anyone takes an item out of the building without permission or unpaid for, scanners at the exit can set off an alarm. For access control, staff (and visitors) can use RFID devices such as fobs, wristwatches, and smart cards as electronic keys. Each individual has controlled access to different areas of the building. With this, you can control who assesses where. In case of emergencies, emergency services can use these tags to locate people in the building so that emergency services can find them.

In conclusion, 

RFID technology has a lot to offer retailers. Brand owners can identify every product in-store with a unique identifying number. RFID helps to provide accurate data on the number of goods getting sold, aiding in reshelving and restocking activities.

RFID systems work with modern technologies like POS Systems, smartphones, apps, and computer systems. Innovative ways of using this technology arise constantly. With these benefits, it is understandable why this technology is catching up in the retail setup. For full implementation of RFID solutions in your retail establishment, contact