Retailers using RFID technology to stop theft may save $101 billion in costs

According to retailers, employee theft accounts for approximately one-third of all theft. RFID technology enables retailers to understand their true inventory so they can react when losses occur. Fraudulent returns accounted for 13.7% of total returns last year, worth $74.3 billion. If RFID technology can prevent losses caused by theft, it could save retailers $101 billion in costs.

Bill Hardgrave discussed the use of RFID technology to deter theft at the Retail Federation's "Big Show." “Especially with chain Stores — they steal stuff from one store and give it back to another store,” Hardgrave said. “With RFID, when you have full visibility through the point of sale, you It’s possible to capture it.”

Research in 2023 shows that the average inventory loss rate for North American retailers is 1.6%, of which internal and external damage account for 65%. Retailers were caught off guard and took drastic measures. A quarter of retailers reported closing stores and a third were making changes to reduce in-store inventory to prevent crime.

Dr Read Hayes, an expert on the retail crime industry, is outspoken about the under-utilization of proven technologies in the loss prevention field. As founder and leader of the Loss Prevention Research Council (LPRC), he has been at the forefront of retail crime research and has received support from industry giants such as Walmart, Target and Home Depot. LPRC’s extensive research and advanced laboratories demonstrate the transformative potential of technology, particularly RFID-based systems, to address issues of cargo damage, fraud and violence.

Recently, Home Depot discovered and prosecuted an organized theft ring that reportedly stole $1.4 million worth of merchandise from the store. At the same time, their competitor Lowe's announced that they would integrate Project Unlock into their future strategy using RFID-based technology.

RFID tags store product information, such as item description and price, and provide real-time supply chain location information; when there is no direct line of sight, RFID tags can be scanned up to 40 feet away from the RFID Reader to quickly locate items ; The RFID reader can scan multiple RFID tags at the same time, greatly reducing the time of receiving, sorting and fulfillment. RFID solutions allow managers to track inventory changes in real time and send alerts when inventory is low or needs to be replenished; RFID technology also prevents theft at all levels, including employees and customers. This may include tracking the location of stolen merchandise and returning it to its original location.

RFID technology plays a wonderful role in tracking all products throughout the retail supply chain. Businesses can deploy RFID technology to manage and track every item in inventory from source to final destination. By working with manufacturers, retailers can also use RFID readers to record price, quality information, shipping details and intended destinations for specific items. RFID tags can provide enterprises with informed business decisions, demand analysis and prevent inventory shrinkage at every stage of the supply chain based on the data collected.

During the inventory tracking process, companies can know the current location of goods, the number of items, and how long it will take to replace items lost in transit, all thanks to RFID technology. It is worth mentioning that once employees know that every item is being tracked, employees' intentions to steal will be relatively weakened. Using RFID to prevent retail theft can increase employee accountability while helping to optimize upstream distribution processes.

Before September 2, 2022, Walmart has required all suppliers that supply toys, household items, electronic products and sporting goods to it to equip each item with an ultra-high frequency RFID tag. "This is an extension of the RFID mandate they introduced in 2020, which requires products in a handful of other departments such as apparel, Jewelry and tires to be RFID tagged," Walmart explains on its website. Employing RFID technology enables Walmart to track Inventory helps it manage out-of-stock issues. This management includes not only theft or internal theft, but also merchandise that is not on the shelves due to damage or unauthorized removal by employees.

Walmart applies RFID tags at the item level, which the company notes on its website: "This means that items in every product category that requires RFID tags will have an RFID tag on the item or its packaging." For example, from Starting in 2020, all clothing in Walmart stores will be equipped with RFID tags. The company added: "Anyone purchasing clothing from Walmart, whether it's a women's shirt or socks, may have noticed an RFID tag embedded on the price tag or affixed near the barcode."

In fact, the impact of stolen goods on the brand far exceeds its own value. When inventory is stolen, it can also negatively impact customers and salespeople. Consumers want to be able to purchase products in stores quickly and intuitively. Merchandise theft puts products at all price points at risk, forcing stores to lock not just luxury products behind security systems, but lower-priced products as well. Customers would have to ask store staff to unlock these items while shopping, even low-value items. This will greatly reduce the shopping experience for consumers.