Office products retailer Staples said it is conducting an RFID pilot in which store inventory will be identified with so called “active” RFID tags that broadcast their position proactively. The twist: Staples will defray the normally expensive cost of active tags, and even item level tagging generally, by recycling the tags across perhaps several hundred items as tagged product is sold.

In a pilot being conducted right now in a Staples store in Montreal, a group of a few hundred SKUs is being tagged with active tags (from Fujitsu). This will enable a reader network in the stores to follow the movement of the goods from the backroom through point of sale. The benefit, if such a system was rolled out completely: virtually 100% accuracy in a store’s perpetual inventory records, and precise identification of the location within the store of tagged product, making it easier for employees to find.

Active tags proactively broadcast their signals, as opposed to passive tags (such as the EPC tags most commonly used for retail supply chains), which rely on power from the reader itself to energize the tag and broadcast the information. As a result, active tags are much more expensive, as much as $5-8.00 each for this kind of application.

This would clearly be unaffordable for retail applications – unless the tags can be reused. That’s what Staples is trying to do. If a $6.00 tag could be reused 300 times, the cost per use would be only 2 cents each… making it very affordable versus the operational benefits. 

The Staples store in Montreal conducting the pilot receives virtually all of its merchandise direct from vendors, not from a corporate distribution center. In the pilot, the selected SKU are tagged as part of the receiving processes, linking the RFID tag ID to SKU information in the store inventory database. After the product has been sold, the tag is removed, and taken back for reuse.

It is not clear whether the check-out process automatically makes the tag ID available again for reuse, or whether that is another manual step in the backroom. This would be a critical element of the total system, as the danger of re-use is that tag IDs could get out of sync with the product to which they are actually applied.