2025: The year RFID breaks through

There is finally widespread industry consensus that RFID provides value, and on how and why it does so.

Since the early 2000s, RFID has existed in sort of a retail technology gray area – most industry members and experts have agreed it can be practical, but with little consensus on specific use cases.

Based on what I saw and heard at the recent NRF 2025: Retail’s Big Show, this is no longer the situation. In a recent column I listed RFID as a trend to watch at the 2025 edition of the Big Show, and in this column I will examine three reasons its place in retail is now solidified.

Tags and readers evolve

RFID requires placing millions of tags on products at the source, which then must be scanned and read. Traditionally, tags were pricey and often obtrusive on the product, while readers were expensive to place and maintain. 

In addition, RFID tags generally did not work well with liquids or metals, including metal shelving. However, modern RFID tags are not much larger than a speck of dust and effectively work with any product or environment, including those involving liquid and metal.

And reader technology has also evolved to include ceiling-mounted readers that can continually scan and monitor all the tagged products in a store or warehouse, as well as robots that autonomously scan items as they rove the aisles. Both can offer advantages in accuracy and long-term efficiency and effectiveness over traditional fixed or handheld mobile readers (which still exist in vastly improved form).

One item, many channels

The journey a product takes from source to customer is much more complex than it used to be. An item might start in a warehouse, be placed on a store shelf, and then picked from the shelf to fulfill a curbside, BOPIS or ship-from-store order. 

It may also be transported to a different store hundreds of miles away to avoid being marked down or picked directly from the warehouse to fill a digital order that may come from a retailer’s own e-commerce site, third-party e-commerce marketplace, or social media site, to name just a few digital sales channels. 

And none of this even considers the immense complexities of omnichannel returns. At the Retail ROI annual Super Saturday event held the day before the Big Show kicked off, Lee Holman, VP research of IHL Group, said top-performing retailers are more likely than their laggard peers to already be using RFID.

"RFID and its positive impact upon accurate inventory data becomes even more important in the age of AI, ship-from-store and BOPIS," Holman said. And he’s right.

Fraud and theft meet their match

Criminal activity is having a massive negative impact on retail. Fraudulent returns and claims resulted in a $103 billion loss for retailers in 2024, with 15.14% (up from 13.7%) of all returns deemed fraudulent, indicates data from Appriss Retail and Deloitte.

[READ MORE: Losses from return fraud and abuse exceed $100 billion]

Meanwhile, data from the NRF reveals that losses from shoplifting are spiraling, while the supply chain is also a major source of shrink both due to theft and error. 

RFID tags provide a major deterrent to retail fraud. They enable retailers to avoid accepting returns of items that are counterfeit, not the same products that were purchased, goods bought from another retailer, or items that disappeared from the supply chain without being legitimately purchased.

The tags also alert retailers when a product is moving someplace it shouldn’t, such as out of a warehouse or through a store exit without first being checked out. At minimum, they can be flagged as stolen merchandise or even identified for security or law enforcement personnel to track down. 

Don’t call it a comeback – RFID has been here for years. A better term might be coming of age. The value was always there, now it’s being fully harnessed and recognized.

Editor’s Note: In next week’s column I will look at key developments in artificial intelligence seen at NRF 2025: Retail’s Big Show.