By Joe Cox
Staff Writer

Customers at Wal-Mart's Colby Court location gazed with confusion at two dozen protesters chanting and carrying signs at the parking lot entrance Saturday, Nov. 5.

"Am I worried about spy chips? Not really," said Stefanie Taylor, a customer from Bedford, reacting to the demonstration. "It would be a little weird if they could follow me where I'm going but I don't think it would pose a threat."

About 25 protesters picketed Wal-Mart because the store carries products that contain radio frequency identification (RFID) tags. The miniature electronic circuits offer advantages to suppliers and retailers that surpass the bar code inventory system, but they fear that the technology is a serious threat to privacy. (Joe Cox Photo)

Protesters handed out leaflets that read, "RFID poses serious risks to privacy and civil liberties."

Radio frequency identification, or RFID, is a product tracking technology Wal-Mart is using on a limited basis that could become as ubiquitous as bar codes.

The tiny RFID tags contain miniature microchips and antennas that transmit data when energized by a reader device within 30 feet. Unlike bar codes, the "spychips" can be embedded so that a consumer would never know it's there by looking at the item. No regulations exist to require RFID tag labeling on products.

The technology offers supply chain advantages for manufacturers, suppliers and retailers by improving the way the things get from the factory to us. Doing it cheaper is especially important for a retail business like Wal- Mart, whose mission is based on providing low prices.

Privacy issue
"RFID is a technology that has many good uses, but there's no reason it needs to be sold to individual consumers," said protester Joel Rauch. "It's one thing to track inventory, but there's no need for item-level tagging. I object to the idea that it's OK to track people the same way you track inventory."

Rauch is a member of a national privacy rights group headed by Nashua resident Katherine Albrecht, founder and director of CASPIAN, Consumers Against Supermarket Privacy Invasion and Numbering.

"We are calling on Wal-Mart to stop the placement of RFID tags in individual items that consumers would buy and take out of the store," Albrecht said.

RFID is acceptable up to the point where items are stored in the retailer's back room, according to Albrecht. Once the products hit the shelves in the store, she has issues with the technology.

Albrecht is the co-author of "Spychips: How Major Corporations and Government Plan to Track Your Every Move with RFID."

Critics say the analogies of the yellow star used to mark Jews in Nazi Germany and the Biblical comparisons to the "'mark of the beast" in Albrecht's book unnecessarily spread hysteria and fear. ("The Spychips Threat: Why Christians Should Resist RFID and Computer Tracking" is another Albrecht title that has not been released yet.)

False fears or real worries?
Others praise the attention to a new and relatively unknown method of data mining that could be a threat to personal privacy if left unchecked.

"It's a false fear, in my opinion," said Steve Varga of Bedford after he passed the protesters on his way into Wal-Mart. "I'm an RF engineer, so I know RF pretty well," he said.

Varga is vice president of engineering at DTC Communications, a maker of communications products for law enforcement and military applications in Nashua. He was confident that Wal-Mart would soon offer customers the option of erasing RFID product tag data after leaving the checkout and before leaving the store.

But that's not good enough for Albrecht.

"One of the things they envision doing is using the RFID tags on things that consumers pick up as homing devices so they can literally track people around the store with pan and tilt cameras, and follow the entire duration of their shopping trip," she said.

The checkout counter represents a significant threat to privacy, Albrecht said, because that's where the product is linked to the purchaser when a credit card, debit card, courtesy card or driver's license is scanned at the point of sale, thus linking the buyer with an individual RFID tag.

Printed bar codes on products are all the same for like items but RFID chips are all unique.

The effect of RFID frequencies on the human body and products is another area of scientific study. Researchers at the Auto-ID Labs at MIT are looking at the impact of frequencies on the stability of pharmaceutical ingredients.

It's all about better service
The implementation of RFID in retail is quickly moving from experimentation to widespread application. The U.S. market was $400 million in 2004. That's expected to grow to nearly $4.2 billion by 2011, according to a report by research company Frost & Sullivan. Some industry analysts say, however, that growth is not on par with earlier expectations because of questionable return on investment.

The annual holiday retail study by Deloitte & Touche reveals that retailers are responding to shoppers who want better customer service, like being able to actually find an advertised product on the shelf.

Wal-Mart points to an independent study by the University of Arkansas that shows customers at its stores were able to find items 16 percent more often than before the retailer started using RFID. And out-of-stock RFID tagged items were replaced on the shelves three times as fast.

Results like that are increasing the pressure Wal-Mart is putting on its suppliers to get on board with RFID. In January, it required its top 100 suppliers to adopt RFID. Some, such as Hewlett Packard, go beyond Wal-Mart's demand to provide interoperability at the product case and pallet level. HP's item level tagging is specifically opposed by CASPIAN.

Protesters on Nov. 5 were focusing their displeasure on HP printers featuring RFID tags for sale at Wal-Mart.

Industry observers say the price of RFID tags is key in a business decision to switch to the new technology, and prices continue to go down. But the freedom to wait for the right return on investment is not an option for the biggest Wal-Mart suppliers given the mandate, if they want to continue to do business with the world's biggest retailer.

More than 500 Wal-Mart stores have installed the RFID equipment. That number is expected to double by the end of next year.

Local customers unconcerned
Wal-Mart customers in Bedford appeared to be cautious or unconcerned.

"Let's face it," said Wayne Bickford of Pinardville. "I'm not in favor of being tracked once I leave the store with my product."

Susan Allen of Goffstown was asked if she would be alright with an RFID tag that could be read once she left the store, like an EZ Pass transponder at a toll booth.

"I guess I wouldn't be concerned about it," she said. "I would imagine it would help (the store) do its inventory. It doesn't have a little camera in it. It's not taking pictures of me."

Lisa Markewitz of Bedford said she would not be worried at all about RFID chips.