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Things to Remember While Choosing an RFID Tag - Criteria, Types & Benefits

  • Mahesh Tiwari
  • May 30, 2024
  • RFID
Things to Remember While Choosing an RFID Tag

The implementation of RFID technology in businesses has resulted in a significant rise in productivity. An RFID tag allows owners to keep track of their assets & streamline many other activities.

However, due to such vast use, there are a variety of RFID systems in the market presently. So, how will you choose the best one for yourself? You'll find the answer right here.

But, before we discuss that, let's first discuss what is an RFID tag.

How Does an RFID Tag System Works?

RFID stands for Radio Frequency Identification, it's a system that uses electromagnetic waves to communicate information. You can find multiple RFID applications for your business, like collecting information on items, tracking assets, streamlining billing, etc.

Two primary components of RFID Technology are RFID Tag and RFID Reader. So, let's discuss how a Radio Frequency Identification system works.

The tag is responsible for storing information about an item. Inside it, you'll find an RFID Chip and an antenna that acts as a transponder. The tags can use these antennas to broadcast information to an RFID Sensor, when inside its range.

On the other end of the system, is the reader. An RFID reader creates an electromagnetic field around it. Once a tag enters this field, it will broadcast a signal back to the reader with preprogrammed data.

What are the Basic Classifications of RFID Tags?

Based on RFID tags, we can divide RFID systems into two types - Passive RFID Tag and Active RFID Tag. The only difference between the two is the implementation of a power supply.

Active RFID tags contain a power supply inside them. Thus, they do not depend on the signals coming from an RFID reader to power them up. There are two types of active tags - Transponders and Beacons. Transponder tags only start broadcasting signals once they come into the range of a sensor. Beacons broadcast signals continuously, regardless of the presence of an RFID sensor.

Passive tags, however, lack any individual power supply/battery inside them. They need the signals coming from a reader to energize them. They use the energy in the signal to broadcast back a signal to the reader.

Due to the difference in the energy of the broadcast, active tags can broadcast signal way further than passive tags.

Benefits of Implementing RFID Technology to Your Business

There are several benefits of implementing RFID technology into your business. An RFID chip can store essential information regarding your items like product number, type, price, etc. This information can be read by an RFID reader & logged into your system. Let's talk about why you should use RFID for your logistical needs.

Asset Tracking

This is one of the biggest advantages of using RFID systems in your business. By strategically placing RFID readers inside your place of business, you have real-time information regarding the location of your assets. This gives a huge advantage in sectors like manufacturing, supply chains & warehousing. Instead of keeping manned stations to inspect the smooth transit of your assets. You can just automate the whole process and get the live locations of each item.

Streamline Billing

Unlike barcodes, which usually identify a product group, an RFID tag can identify the name and price of an item. The employee at the billing doesn't need to put in any information regarding an item to create an invoice. They can just scan the item with a reader, and the system will automatically fill in all the details. This not only makes billing & sales more efficient, but it also prevents any pricing mistakes.

Preventing Stock Shrinkage

Stock shrinkage means when you have an item listed on the accounting record that is missing from the actual inventory. To clarify, the loss of items due to employee theft, admin error, vendor fraud, etc. This can lead to a decrease in your overall profit. By implementing RFID technology, you can reduce stock shrinkage to a negligible margin.

RFID allows you to keep track of every item's location & when they have left the premises of the store. This technology has been shown to decrease stock shrinkage by up to 55%.

Detering Theft

Integrate RFID readers at strategic points, like the inventory, display counters, billing sections & exit gates. This will allow your system to alert you every time an item is leaving your premises without authorization. According to a GRTB study, retail shoplifting accounts for a loss of ₹9295.9 Crore in India in a year.

By implementing a system of RFID tags & readers, you can reduce the losses from shoplifting by up to 75%.

Automated Inventory Management

Inventory management is an essential task for any business. It allows you to record your net profit and sales, investigate & deter theft, and aid in restocking items. However, in even small businesses, inventory management can become a tedious task, due to the sheer number of items. It is a time-consuming activity, and when it comes to business, time is money.

Luckily, you can completely automate this process, by integrating RFID into your business. An RFID system will link with your computer & company's database. Anytime an item is sold, or new items are brought in, the readers will scan them and update the database. This allows you to have real-time insight into your inventory without having to manually manage it.

How to Choose the Right RFID System for You?

Due to their vast advantages, we've developed several types of RFID systems to suit the needs of a variety of industries. Depending on the application, type of surface, range requirement, durability, etc, there is a range of tags.

So, below are the things you need to keep in mind while selecting an RFID tag for your business:


Depending on the application of tags, they might have to resist damage, scratches or extreme temperatures. Thus, manufacturers specifically design tags that are tailored to resist damage common in the environment they are made for.

RFID Tag Size

Due to the varied application of RFID technology, the size of the item can range extremely. That's why manufacturers make tags in a variety of sizes. For example, jewellery tags can be as small as a couple of centimetres in length. And tags used in automobile manufacturing industries can be a couple of inches in length.

RFID Range

Another factor to keep in mind is the broadcast range of an RFID tag. Passive tags generally have a short range of 30 - 40 feet, active tags can broadcast as far as 350 feet. So, for industries like warehousing and healthcare, it's better to use long-range active tags. However, for small to medium-sized retail stores, passive tags work just fine.

Value of Items

Due to being more advanced and having a shorter lifespan, active tags are more expensive than passive tags. So, in many situations, their implementation incurs more costs than their additional benefits. However, for high-value items like jewellery, implementing active tags is a viable option.

Disruption Causing Element

While RFID technology is immune to most issues, due to the nature of its technology they have some vulnerabilities. An RFID tag works by transmitting data through electromagnetic signals. Certain materials like metal and liquid can disrupt these signals due to the induction of eddy currents.

So, if your item's surface is metallic or it contains liquid inside, you should choose RFID tags specially designed to overcome these problems.

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 24, 2023

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