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RFID vs Barcodes: Which is Right for Your Business?

  • Mahesh Tiwari
  • Dec 04, 2023
  • RFID
RFID vs Barcodes

One of the most important parts of running a business is keeping records of all your assets, both incoming & outgoing. In the past, people would do this manually into registers/diaries. However, since the implementation of computers into businesses, we have partially or completely automated this process. This is where RFID and Barcode technology comes into play.

We use both technologies to store essential information about assets in our inventory. RFID & Barcodes are easy to use and helps in automating a lot of time-consuming & labour-intensive activities.

However, which one is the right option for you? You’re in luck because that is precisely what we’ll discuss today.

What is the Difference between Barcode & RFID Technology?

Although we use them for similar reasons, the technology behind either is vastly different. While on the one hand, RFID works on wireless radio communication. Barcodes, on the other hand, work on decoding symbols using lasers, LED or Image Processing.

Let’s discuss them individually in a bit of detail.

RFID Technology

An RFID system consists of two major components – RFID Tag and RFID Reader. Both components communicate with each other via radio signals. The tag consists of a microchip & an antenna that works as a transponder. The reader consists of an antenna, that sends & receives signals to & from the tags.

The reader creates an electromagnetic field around it (known as the readable zone). Once the tag enters this field, it broadcasts back a signal to the reader, which then decodes it & sends it to the system.

Depending on the type of RFID tag – Passive or Active, they function slightly differently. Passive tags use the radio signals sent out by the reader to power up & broadcast back their signals. While, Active tags have an integrated power supply, which they use to transmit their signal. Active tags may transmit their signal continuously or once they come inside a reader’s readable zone, depending on their type.

Also, passive tags use a fraction of the energy provided by the reader’s signal to broadcast their signal. Hence, their signal is not very strong & does not have a very good range. However, an active tag uses its own power supply, so it can transmit signals to far longer ranges than passive tags.

Barcode Technology

Unlike RFID, barcodes do not use radio signals to communicate, hence, all barcodes are passive. Much like RFID, barcodes also have two main components – Barcode Label and Barcode Scanner. The label holds the information, and the scanner reads the information & sends it to the decoder. We classify barcodes into two types, depending on the format they use to store information.

  • One-Dimensional (1D) Barcodes
  • Two-Dimensional (2D) Barcodes

1D barcodes consist of black & white vertical bars, holding information along a single axis. They store information in binary forms, with black being ‘1’ & white being ‘0’. Depending on the type of scanner, it will capture this code and decode it into binary form and send it to the system. The system will then convert it into a readable format.

2D barcodes store information along two axes, and thus, can store vastly more information than 1D. You can only scan these types of barcodes using an Area-Imaging Barcode Scanner. One of the most popular types of 2D barcodes in use today, is QR Code.

A Comparision Between the Pros & Cons of RFID & Barcodes

Now that you know the basic principle behind RFID & Barcode technology. Let’s compare the pros & cons of choosing either of the two. But, before we do that, let's see their advantages & disadvantages.

Advantages & Disadvantages of RFID



It’s efficient, as a reader can interact with multiple RFID tags at the same time.

They are costlier than barcodes, due to having an integrated microchip.

RFID automates data collection & tracking. Any tag inside the reading range will automatically communicate with the system.

It takes more time to integrate & implement RFID in your business.

Does not require to be in the visual line of the reader.

It can accidentally scan data from tags you don’t want it to if the tag is within the range.

The data is encrypted, so only systems with the password can decode & collect the data.

RFID technology is vulnerable to distortion from metallic surfaces & liquids, due to eddy currents.

Advantages & Disadvantages of Barcodes



Cost-Effective, barcode systems are almost 10 times cheaper than RFID systems.

It can only scan items individually, so, they aren’t as efficient as RFID.

Barcode is available almost everywhere & can be read by any barcode scanner. So, it removes the cost of implementation of specific technologies.

Lacks any security feature, as anyone can scan and read it using a standard barcode scanner.

Can be put on any material without the risk of it becoming unreadable.

Needs to be kept in a straight line for the scanner to read. Thus, the barcode must be put on a plain surface.

It is very quick to implement in your business.

Unlike RFID they are not reusable, as the information on a barcode is permanent.

Now, we have a clear picture of the individual pros & cons of using either RFID or barcodes. Let’s do a comparison between the two on some key points.

Point of Comparison

RFID Tagging

Barcode Labelling



Maximum Range

Passive – 40 feet

Active – Up to 1500 feet

40 – 50 feet



Data Security


Quick Implementation


Distortion from Metallic Surfaces


Line of Sight Requirement



0.3 seconds

1 – 2 seconds

Read Rate

As many as in the readable range

One at a time

How to Select the Right Tracking Technology for Your Business

As shown above, there are both advantages & disadvantages to using either of the two tracing systems. The solution is to find out which one is the best choice for your business venture. Certain factors can help you decide the correct option for yourself.

Type of Business/Application

First and foremost, where do you need to apply a tracking system? Depending on the number of assets & speed requirements, you can choose between the two. For example, in warehouses, where you must track multiple assets & pallets at once and quickly, your best option is to go for RFID. However, in small retail shops, with low scan volume, you can depend on barcodes.

Item Accessibility

Item accessibility is another deciding factor between Barcode and RFID Tracking Systems. If the items are not within the line of sight or very far away. Then, using a barcode will be very time-consuming and labour-intensive. Rather, just implement RFID and let the reader automatically scan all the items.

Environmental Factors

A big problem with barcode systems is their vulnerability to environmental factors. Scanners are at risk of malfunction due to dust. Barcode labels can also be damaged by scratches, smudges, moisture & heat.

So, if you are operating in an environment with such risk factors, you may want to look towards using RFID.

Automation vs Human Resource

The biggest benefit of RFID is that it completely automates inventory management & tracking. Barcodes, on the other hand, require an employee to manually use scanners to collect data. But barcodes are also cheaper to implement and use, unlike RFID systems.

So, you must decide, what is the better option for you. Hire employees specifically for the task of asset tracking & scanning barcodes. Or automate the whole process at a cost.

Value of items

Like everything, implementing a tracking system also requires a cost-benefit analysis. On one hand, RFID provides you with real-time, automatic updates on your assets. On the other, they are much more expensive than barcodes, which do the same but not as efficiently.

Judging by this, barcodes seem like the obvious choice, but this is where the cost-benefit analysis comes in. Let’s say your business sells very expensive items, like jewellery. Although RFID will be more expensive than barcodes, the value of the items is so high. So, it’s justified to add a little more expensive to ensure the safety of this item.

You must decide which option will give you the most benefits in the long run.

Need for Updating Information

Lastly, a major difference between RFID & Barcodes is their ability to be programmed. In case there is a need to update information on-site, you can use an RFID reader to update the information on the tag at a moment’s notice.

However, since barcodes just represent 1s & 0s in the forms of black & white lines, and they are not digital. It is impossible to update the information on a barcode.

Disclaimer: The information presented here is for general information purposes only and true to best of our understanding. Users are requested to use any information as per their own understanding and knowledge. Before using any of the information, please refer to our Privacy Policy and Terms and Conditions.

  • Created on Mar 23, 2023

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