German store group Metro has decided to drop the use of RFID tags in customer loyalty cards used at its Extra Future Store supermarket in Rheinberg following pressure from consumer groups.
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Metro had embedded RFID chips in loyalty cards for the sole purpose of identifying the age of shoppers wanting to view DVD trailers.
The ID chip on the loyalty card, which shoppers use to activate the monitor for viewing DVD trailers, contains the customer number only. Data about the individual shopper, such as age, is stored in a database linked via wireless Lan technology to an RFID reader in the DVD section.
"We wanted to test RFID technology for this application instead of barcodes, but because of protests by some groups, we have decided to use barcodes," said Metro spokesman Albrecht von Truchsess..
None of the other areas where Metro is testing RFID technology have been affected by the company's decision to abandon RFID chips "We remain totally committed to using RFID in the area of supply chain management," he said. "A top priority is the use of this technology for tracking pallets and cases. And, although we're still interested in testing the technology at the item level, this isn't a priority at the present."
Metro views RFID technology first and foremost as a way to manage the huge flow of merchandise in and out of stores more effectively, while at the same time reducing inventory losses and labour costs.
From November, Metro will require 100 key suppliers to affix smart tags to their pallets and transport packages.
The retail giant will continue to conduct RFID tests at the item level as part of its "smart shelf" pilot system, which automatically informs staff to replenish select merchandise. Deactivators at the store exit enable shoppers to erase the product code stored in the RFID tag but not the chip's
Last year, Wal-Mart Stores and the Benetton Group were among a group of high-profile retailers forced to scale down their ID tag strategies following complaints by activists concerned about privacy violations.
Activists have also expressed concerns about the plans of the European Central Bank to embed RFID chips into the fibres of bank notes to thwart counterfeiters. They are worried that the chips could record when and where monetary transactions take place, destroying the anonymity that cash payments typically provide.
Metro owns and operates more than 2,300 wholesale stores, supermarkets, department stores and specialty retailers, such as consumer electronics stores, mainly in Germany and the rest of Europe.
John Blau writes for IDG News Service