As retail shrinkage continues to increase, more and more store owners are turning to RFID (Radio Frequency Identification) technology. This comprehensive guide will delve into the details of this revolutionary technology and explain how it can help you reduce losses, improve inventory accuracy, speed up processes within your store and even increase sales.

What is RFID?


Radio Frequency Identification is a technology that uses radio waves to wirelessly identify, and monitor objects, people, or animals. It uses tags that contain an electronically-stored unique ID and antennae to communicate with an RFID reader.

How Does RFID Work?


The system uses an RFID reader with an antenna to send out radio frequency waves. This energy is absorbed by the RFID tags, which triggers them to transmit their stored data back to the reader.

The reader then processes the information and sends it to a computer, which can use the data for the intended purpose. The tag, reader, and computer are all connected via a wireless network so that data can be quickly and accurately transmitted and collected.

Types Of Radio Frequency Identification Systems


There are a variety of radio frequency systems on the market today, all categorised by their frequency range. Here are the three most popular frequency range categories of RFID:

Low-Frequency Range:


The primary frequency range is between 125 – 134 kHz. Low-frequency systems, such as access control and animal monitoring, are best for short-range (about 10cm) identification.


High-Frequency Range:


The primary frequency range is 13.56 MHz. High-frequency systems are best for more complex identification tasks, like payment processing, library tracking, or medical records management.

Ultra High-Frequency Range:


The primary frequency range is between 860 – 960 MHz. The interesting thing about Ultra high-frequency range is that it has two main types of RFID: active and passive.

What Is Passive RFID?


Passive RFID is an ultra-high frequency radio identification system that does not use an active transmitter. Instead, these tags rely on an external power source, such as a reader or antenna to broadcast their signal. This is also the chosen solution for retail stores, factories and general businesses. It is the most used format of radio frequency identification and can read in excess of 10 metres in certain applications.

What Is Active RFID?


Active RFID is an ultra-high frequency radio identification system with an active transmitter. This means the tag has its own source of power that allows it to broadcast data over longer distances than passive tags (up to 10 metres). Examples of active systems are e-tags and containers.

RFID Tags And Readers


Tags and readers are the two main parts of an RFID system. Here is a detailed description of them both:

What Are RFID Tags?


Radio frequency identification tags are, in plain terms, miniature electronic storage devices with stored information. Usually, tags contain a microchip and an antenna to communicate with readers. The microchip and antenna are barely visible and attached to a substrate.

Each tag is also unique and coded with a specific identification. This means no two objects, animals, or humans with tags have the same identification.

Take, for example, T-shirts with RFID tags. Each T-shirt would have its own unique identification tag attached to it although they all have the same barcode according to their size and colour. This enables the advantages of inventory control.

What Are RFID Readers?


Have you ever seen a black device in the shape of a handheld scanner used in retail stores? That’s an RFID reader. It’s a device that reads the data from radio frequency identification tags and sends it to a computer. RFID readers can be table, wall or roof mounted.

RFID readers (often referred to as scanners) use radio waves to read information and then convert that data into a digital form. It’s like a translator between the tag and the computer, making it easier for the computer to receive the data.

RFID vs Barcode: What’s the Difference?


RFID vs barcodes are two very different technologies. Here is a comparison between the two:



  • Radio Frequency (RF) technology.
  • Does not require a line of sight to read information.
  • Memory storage is possible.
  • Faster processing of inventory data.
  • Real time data on inventory
  • Products can be scanned only once per item – eliminating errors during stocktake 



  • Optical (laser) technology.
  • Requires line of sight which means locating every item barcode
  • Memory storage is not possible.
  • Slower processing of data.
  • Barcodes can be scanned several times per item, supplying incorrect stocktake information


These are just a few comparisons between the two, but as you can see, radio frequency identification offers many more benefits than barcodes.


What Are The Benefits Of RFID Over Barcodes?


  1. Automates data collection: The RFID reader and tag work for you. All you have to do is just bring the reader in the vicinity of the tag. This saves time and labour costs.
  2. Tags hold more data: The tags can store up to 2 kilobytes of information, which is more than enough to store data such as expiration dates, product descriptions, and serial numbers.
  3. The technology eliminates human error: RFID tags can reduce human errors associated with manual data collection by automating the process.
  4. Increased security: Because RFID tags can be scanned from a distance, controlling access and ensuring security is easier.
  5. Real-time data updating: Radio frequency identification can be updated in real-time, making it easier to track inventory and manage stock levels.
  6. Reduced shrinkage: By using RFID, businesses can track inventory in real time, which helps to reduce shrinkage and losses.


Where Do Barcodes Still Play A Major Role?


RFID does not replace barcodes; it complements them. In fact, an article by RFID Journal states, “It’s unlikely that radio frequency identification will replace bar codes in the next 25 years, if ever. The two technologies don’t compete—they complement each other.” For example, the barcode can provide backup if an RFID tag cannot pick up an item in a certain location or gets damaged.

If RFID does not replace barcodes, then where do barcodes still play a major role?

Barcodes still play a major role in a variety of different industries. Retail, healthcare, warehousing, manufacturing, financial services, and many more all use barcodes to keep track of their items and products.


Where Can RFID Technology Be Applied Today?


This technology can be applied to various industries in today’s business landscape. Below are a few of the most popular applications:


1. Supply Chain:


The supply chain involves tracking products from the origin to the destination. RFID tags and readers can track and monitor inventory and assets in real-time, allowing companies to manage the production line better.


2. Retail:


As mentioned before, RFID tags are placed on items for sale and read by a scanner in the store. This allows retailers to monitor when items go on and off shelves, which helps them manage inventory and identify areas where possible theft may occur.


3. Healthcare:


This revolutionary technology contributed to the modernisation of the healthcare industry. Not only does it help save patients’ lives by providing accurate monitoring of medical devices, but it also helps the pharmaceutical industry. Healthcare IT News states, “Steve Wenger, Inpatient Pharmacy Manager at the Rady Children’s Hospital, said that RFID-enabled medication automation together with pre-tagged vials has brought remarkable value to his team through high cost and workforce time savings.”


4. Production Environments (Factories)


RFID within a production environment, for example, in factories, can transform how companies manage their production processes. By providing reliable and accurate monitoring information, RFID can help reduce downtime due to lost or misplaced pieces of equipment and components, optimise maintenance schedules and provide real-time inventory information.


5. Inventory Management


Stocktaking is one of the oldest and most important processes in inventory management. RFID can be used to monitor stock from origin to destination, allowing companies to have a better insight into their product flow.


6. Laundry Management


This is an interesting field where RFID technology can be applied. By using RFID tags, the need for manual tracking and sorting of laundry items is eliminated. The tag can be attached to a customer’s item and then tacked throughout its journey through the process from check-in to washing to delivery. Using this technology in laundry management has been found to save time and money as well as provide more accurate reporting information.


Successfully Implemented Radio Frequency Identification Cases


There are various companies that have successfully implemented this technology in their operations. Here are a few examples of how some of them have implemented RFID:


Outdoor and Hunting Retailer


A major outdoor retailer in South Africa implemented RFID technology in all their stores across the country to track their inventory, manage stock levels and reduce losses. They found that after implementing this system, the accuracy of stock-taking increased, and their employees’ workload decreased significantly. Products are apparel optics, reloading, fishing, books and ammunition. Because RFID stocktake happens more frequently resulting in a more successful business.

University of Rochester Medical Center


The US University of Rochester Medical Center installed RFID technology in their mobile Orthopaedic healthcare units. The RFID technology gave them patient names, records, allergies, cleaning schedules, and cart placement. This enabled them to efficiently track the hygiene and sterilisation of their medical equipment, which helped reduce surgery infections.

Much Asphalt


Much Asphalt is one of the largest producers of asphalt products. They implemented RFID to monitor their trucks entering and leaving the yard to pick up orders. This technology prevents human errors in computer entries, reducing losses in the company.



Bakers is a well-known producer of biscuits. The RDIF they implemented monitors manufacturing quantities in the factory to ensure all products are available at all times, which resulted in a smooth production process. Their stock-taking on products is also highly accurate and can be done multiple times a day.


Laundry Monitoring At A Major Gym Brand


The major gym brand found that the movement of the towels in the laundry room was not being monitored properly, so they decided to install RFID tags on their towels. This allowed them to monitor where the towels were located at all times, with a centralised reporting system that gave them real-time data. No more towels getting lost or taken home by customers!


The Future of RFID


The future of radio frequency identification is bright and it is being implemented in more and more industries every day. As the technology improves, so too does its accuracy and reliability and with the rise in sustainability practices worldwide, RFID could potentially save a lot of trees in the process.

In one article in the RFID Journal, Michigan State University and the University of Parma conducted a study measuring RFID’s environmental impact by looking at trees spared. They found that trees were spared because radio frequency identification technology monitored a product’s lifecycle, from production to end-of-life disposal. This helped reduce the number of trees cut down to create paper labels and other tracking products.

RFID With Milestone


This comprehensive guide to RFID would be incomplete without mentioning Milestone. We provide complete radio frequency identification solutions for production factories, retail, hospitality, and many other industries. Our RFID solutions help increase operational efficiency, reduce costs, eliminate human errors and better manage assets.


If you want to take your business to the next level, contact us to see how radio frequency identification technology can benefit your business!