Remember walking into a retail shop and purchasing apparel? When you go to the POS (Point of Sale) counter, the staff removes the little plastic tag after the payment is done. What is this tag? We often see these small plastic tags, as buttons, or strips, attached to clothing items, shoes, bags, and other merchandise, in many retail stores and departmental stores. When someone passes through the exit gates, with tags attached, the security alarm is triggered. These tags are commonly known as EAS tags.
The Electronic Article Surveillance technology has been in use in retail and departmental stores for decades and has been very successful in preventing retail shrinkage, and theft in stores.
Retail shrinkage, commonly referred to as shoplifting, is a significant concern for retailers worldwide. It refers to the loss of inventory due to theft, administrative errors, supplier fraud, and other factors. According to a Forbes report, shoplifting has become a 100B USD problem in the USA. The kind of retail theft that is happening in retail stores is not run-of-the-mill but well-planned and well-executed as part of organized retail crime (ORC). Most criminals target more than one retail store and if these retailers don’t collaborate with each other or the law enforcement, they don’t even notice that these thefts are part of organized crimes.
To combat this issue, retailers have employed various technologies, including Radio Frequency Identification (RFID) and Electronic Article Surveillance (EAS), along with CCTV, and security alarms.
While EAS security tags are widely used and a cost-effective option, RFID is an emerging technology offering security and efficient retail inventory management.
Understanding Retail Shrinkage
Before delving into the comparison of RFID and EAS technologies, it is crucial to grasp the magnitude of the retail shrinkage problem. According to the Global Retail Theft Barometer, global retail shrinkage accounted for approximately $99.56 billion in losses in 2022. Shoplifting remains one of the primary contributors to this loss, with an estimated 36.8% of shrinkage attributed to theft by customers. According to a survey by NRSS (National Retail Security Survey), most retail shrinkage is due to external theft, at 37%, followed by employee or internal theft (28.5%) and process or control failures (25.7%).
When it comes to items being stolen, it is mostly the small yet high-value items that are conceivable, removable, enjoyable, and easily disposable. These could be electronic gadgets such as smartphones, smartwatches, jewelry items, apparel and beauty products, etc.
What is RFID Technology?
RFID technology involves the use of small electronic tags or labels containing unique identification codes that can be attached to individual products. These tags are designed as hard tags and labels and come with silicon microchips to store relevant data about the products as well as a tag deactivation code which is used to kill the tag after billing.
These RFID tags can be detected and read by RFID readers, enabling real-time tracking and inventory management. Retailers implementing RFID systems can monitor inventory movement, detect unauthorized removal of items, and trigger alarms when necessary.
When it comes to shoplifting, RFID provides another advantage which is accurate identification of the items being stolen. Suppose a customer bought three shirts but paid for only two, and tried to leave the store. The RFID tags in the shirt which hasn’t been deactivated yet would trigger an alarm. This also notifies staff members exactly which item has not been paid for allowing them to politely enquire about the same to the customer and ask them to get the item billed.
Benefits of RFID Technology in Retail
RFID has been touted as the perfect replacement for barcoding and EAS technology, offering several benefits in the retail business. With the development of chipless RFID tags, RFID can completely replace barcoding and EAS tags in retail. Some of these benefits are as follows:
Increased inventory accuracy and no ‘out-of-stock’ scenarios
RFID technology allows for real-time inventory tracking, reducing discrepancies caused by manual counting and improving overall inventory accuracy. With RFID, one can ensure timely replenishment and prevent ‘out of stock’ situations that have huge impacts on retail sales.
Enhanced theft prevention
RFID tags can trigger alarms when detected leaving the store without proper deactivation, deterring potential shoplifters. When compared with an EAS tag, RFID tagging can also allow you to accurately identify which item is being shoplifted or hasn’t been paid for.
Improved operational efficiency
RFID systems enable faster and more efficient stocktaking, restocking, and replenishment processes, optimizing store operations. With RFID, staff don’t need to scan every item one by one, instead can scan multiple items in one go, without a clear line of sight. This also means better inventory control.
Limitations of RFID Technology
Though RFID is an advanced AIDC technology offering better operational efficiency in businesses, there are some limitations as well.
Cost of implementation
Implementing RFID technology can be expensive, particularly for small retailers, due to the need for specialized equipment and infrastructure. It requires a completely new infrastructure set up which means high costs.
Attaching RFID tags to certain products, such as liquids or metals, can be challenging due to interference, affecting the technology's effectiveness in preventing shoplifting for those specific items.
Moreover, some small items need to be tagged with really small a RFID label which sometimes is tricky.
EAS Technology: How it Works?
Electronic Article Surveillance (EAS) technology involves the use of security tags or labels attached to merchandise. These EAS tags contain elements that trigger alarms when not properly deactivated or removed at the point of sale. EAS systems typically utilize magnetic, radio frequency, or acousto-magnetic technologies.
When an EAS-tagged object is taken through the EAS gate system installed at the exit point, the EAS tag sends a frequency signal to the EAS reader system at the gate, which in turn raises an alarm. To facilitate a smooth shopping experience for the customers, these tags are removed post-billing at POS.
Benefits of EAS Technology
EAS technology has been in use in retail for decades now and it acts as a deterrent to shoplifting. Some of the prominent benefits are as follows:
The presence of EAS tags and alarm systems acts as a visible deterrent to potential shoplifters, reducing the likelihood of theft.
Compared to RFID technology, EAS systems are generally more affordable and easier to implement, making them accessible to a broader range of retailers.
EAS technology can be easily integrated into existing retail infrastructure, requiring minimal changes to store layout or operations.
Limitations of EAS Technology
The EAS technology is limited by its technological features. It is a great technology to act as a deterrent but it can be easily removed or cannot identify the exact item being stolen.
Limited tracking capabilities
Unlike RFID, EAS technology does not provide real-time tracking and inventory management, limiting its effectiveness in inventory control.
Vulnerability to tag removal
EAS tags can be tampered with or removed by experienced shoplifters, rendering the technology less effective in preventing theft.
When considering the best technology for preventing retail shoplifting, both RFID and EAS have their unique advantages and limitations. RFID technology offers superior inventory management capabilities and the potential for more accurate theft prevention. However, the higher implementation costs and challenges associated with certain product types may hinder its widespread adoption. On the other hand, EAS technology provides a cost-effective and visible deterrent, yet its limited tracking capabilities and vulnerability to tag removal pose limitations.
Ultimately, retailers must carefully evaluate their specific needs, budget, and product characteristics to determine which technology is best suited for preventing shoplifting within their establishments. Moreover, if one combines the strengths of both technologies, it may present an even more robust solution to combat retail shrinkage effectively.
- Last updated on Nov 20, 2023