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RFID Loss Prevention System and How it Works?

  • Abhishek Shukla
  • Mar 22, 2024
  • RFID
RFID Loss Prevention System and How it Works?

" An RFID Loss Prevention System integrates RFID tags and RFID gate system to keep track of all the assets in a retail store and inventory, preventing theft, inaccuracy and resulting losses. " 



In today's retail environment, the need for effective loss-prevention systems is paramount. With the rise of inventory shrinkage due to theft, errors, and fraud, retailers are increasingly turning to advanced technology to protect their assets. However, the need for a technological loss preventive measure is felt in various other business domains as well, including healthcare, education, manufacturing, mail and shipping, logistics, etc.  

Loss prevention refers to a systematic approach in retail stores and warehouses to keep tabs on each item within the store and inventory, integrating POS (point of sale) operations, returns, POE (point of entry/exit) operations, receiving goods, etc. with a centralized loss prevention system. 

Most retail stores have been using EAS security tags and EAS gates to prevent retail shrinkage and shoplifting. However, EAS security tags are limited in their applications and don’t provide any insights into item movement within a retail store, institute, or warehouse. EAS tags namely EM tags, AM tags, and RF tags don’t come with any microchip and cannot store any information about a product, limiting their use in asset identification and tracking.  

The use of RFID tags and labels, however, in a loss prevention system is an extremely efficient way to identify and track items moving through entry and exit points, points of sales and returns, etc. A more sophisticated way to implement an RFID-based loss prevention system is the GS1 standard RFID-based Electronic Article Surveillance (EAS) system, which uses a Serialized Global Trade Item Number (SGTIN) to uniquely identify each item in the store or inventory.  

Let’s delve into the technical aspects of implementing such a system, including the benefits, challenges, and best practices. 


Understanding the GS1 Standard 


The GS1 standard is a set of global standards for identifying, capturing, and sharing product information. It provides a framework for unique identification of products, locations, and assets across the supply chain. The Serialized Global Trade Item Number (SGTIN) is a key component of the GS1 standard, allowing for the unique identification of trade items at the individual unit level. 

This loss preventive approach combines GS1 standard with RFID technology to register each and every trade item into a centralized database where one can remove and add new items as they are sold and leave the store/inventory or received at entry points respectively. 

The RFID technology uses radio frequency signals to communicate with RFID tags attached to items. These RFID labels can store unique identification information in the microchip embedded with the tag, and transmit the information when interrogated with an RFID reader at POS (Point of Sale) or POE (Point of Entry/Exit), making them an ideal solution for inventory management and loss prevention. 


RFID Loss Prevention System and How it Works?

Implementing the RFID Loss Prevention System 


To implement a GS1 standard RFID-based EAS system with SGTIN for inventory management, and loss prevention, several key steps must be followed: 


1. Tagging Items with RFID Tags 

Each item in the store or inventory needs to be tagged with an RFID tag containing a unique SGTIN. It can be done at the point of manufacture, the distribution center, retail store, warehouse, etc.  


2. Reader Infrastructure 

 RFID readers must be strategically placed throughout the store or warehouse to capture the signals from the RFID tags. These readers are connected to a central system that processes the captured data. One can go with UHF RFID Fixed Readers installed at Entry/Exit points or simply use a UHF RFID Handheld Reader at POE or POS. Being portable, the RFID handheld readers provide great ease and efficiency and enhance productivity.  


3. EAS Functionality 

The RFID system will be configured to act as an EAS system, triggering alarms when items with working RFID tags pass through designated exit points without being deactivated at the point of sale. The RFID loss prevention system also makes sure that items are removed from the database once it is sold and added to the database in case of returns. This works well to enhance customer experience and prevent theft as explained above.  


4. Integration with Inventory Management System 

 The RFID data, including SGTINs, needs to be integrated with the store's inventory management system. It allows for real-time visibility of inventory levels and helps in identifying shrinkage incidents. 

The use of RFID tags for each asset/merchandise ensures that business owners have accurate data-driven insights on the inventory levels and triggers replenishment orders based on inventory, demand, sale, consumption, etc.  



Implementing an RFID Loss Prevention System: Challenges and Best Practices 


Implementing a GS1 standard RFID-based EAS system with SGTIN, an RFID-based loss prevention system, comes with its own set of challenges. These include tag readability, interference, and system integration. To address these challenges, best practices should be followed, such as:

a. Conducting thorough site surveys to identify optimal reader placement

b. Testing RFID tags for readability across different types of merchandise and packaging.

c. Ensuring compatibility and integration between the RFID system and existing inventory management software. 


Benefits of Implementing an RFID-based loss prevention system 


The implementation of such an RFID loss prevention system offers several benefits, including: 


(a). Enhanced Loss Prevention 


The ability to uniquely identify each item allows for better tracking and prevention of theft and shrinkage. The use of alarms and notifications whenever an item leaves the premises without billing or a gate pass prevents shoplifting and cuts losses.  


(b). Improved Inventory Accuracy 


Real-time visibility into inventory levels and item movements leads to improved accuracy and efficiency in inventory management. The use of RFID tags, readers, and antennas in supply chains ensures that warehouse managers have accurate data on inventory and can make data-driven decisions.  


(c). Seamless Integration with Supply Chain 


The use of GS1 standards ensures interoperability with supply chain partners, leading to better traceability and transparency. Attaching SGTIN identifiers to each RFID tagged item allows one to integrate their RFID loss prevention system with any ERP and WMS system, ensuring better results and cost savings.  


To conclude, the implementation of a GS1 standard RFID-based EAS system with SGTIN for inventory management represents a significant advancement in loss prevention technology for retailers. Retailers can achieve greater visibility, accuracy, and security in their inventory management processes by leveraging the power of RFID technology and GS1 standards, ultimately leading to improved profitability and customer satisfaction. 

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 22, 2024

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