RFID, which is an acronym for Radio Frequency Identification, is not a new technology. It was first used in the late 1960's, but it has become more widespread with advances in technology.

RFID Systems consist of a transponder, also known as a tag, which is basically a microchip connected to an antenna. The tag is mounted to an item, such as a pallet of goods in a warehouse, and a device called a reader communicates with the tag via radio waves. Depending on the type of tag that is used, the reader can receive detailed information or it can receive data as simple as an identification number.

RFID is similar to barcode systems in which data, such as a price, is accessed when the barcode is read; however, the barcode must come in direct contact with an optical scanner/reader and the RFID tag is capable of transmitting data to the reader via radio waves and therefore, it does not have to be in direct physical contact with the reader. An RFID reader can receive data from as many as 1,000 tags per second.

The radio signals can transmit through many nonmetallic substances such as rain, fog, snow, dirt and grime, painted surfaces, etc. This gives RFID tags a distinct advantage over optically read items, such as barcodes, which would be useless under similar conditions.

The many uses for RFID technology include:

• Smart labels and security labels printed with digital or conventional equipment
  
  
• Product and inventory management
  
  
• RFID chips in car keys for security
  
  
• Theft control
  
  
• Placement on pharmaceuticals to prevent counterfeited drugs from entering the legal supply chain
  
  
• Increased efficiency in admissions into entertainment or sporting events
  
  
• Increased efficiency in toll road payments
  
  
• Monitoring the whereabouts of luggage, library books, livestock, etc.

It is predicted that RFID use will continue to increase. It is unlikely to ever be as inexpensive to produce as barcoding, but it will become dominant in areas where barcoding and other optically read technologies are not effective.

The basic types of RFID tags can be classified as read/write and read only. The data stored on read/write tags can be edited, added to, or completely rewritten, but only if the tag is within the range of the reader. The data stored on a read only tag can be read, but cannot be edited in any way. Read/write tags are much more expensive than read only tags, so they are not used for tracking most commodity items.

RFID tags are further categorized as:

• Active Tags
  
  Active tags contain a battery that powers the microchip and allows it to transmit a signal to the reader.
  
  
• Semi-Active
  
  Semi-active (or semi-passive) tags contain a battery to run the circuitry of the chip, but must draw power from the magnetic field created by the reader in order to communicate with the reader.
  
  
• Passive Tags
  
  Passive tags rely solely on the magnetic field created by the radio waves sent out by the reader to create a current that can be received by the antenna within the passive tag.

Many people mistakenly believe that RFID is similar to GPS (Global Positioning System) and can be used for detailed tracking, but RFID has a range of only a few feet so long distance tracking isn't possible. Another misconception is that the movement of products with RFID tags can be tracked even after the product is purchased. Most active RFID tags have a read range of about 25 feet, which means the RFID is basically useless outside of the retail store or business.

Security measures and safeguards used to protect consumer privacy when using RFID systems:

• The risk of spying or intercepting data that is transmitted via radio waves is reduced with the use of data encryption and over the air protocols.
  
  
• The protocols require both the reader and the eavesdropper to be within range of the tag.
  
  
• The reader changes radio frequencies rapidly and at random, so it is difficult for a potential eavesdropper to follow the reader.
  
  
• Although it is possible for tags to be counterfeited, it is not very practical because of built-in safeguards, such as the ability of the RFID readers to verify authenticity of the tags.