RFID Benefits and Limitations

Radio Frequency Identification (RFID) is a wireless identification system that uses the radio frequency waves for identity transmission of any object or a person. RFID is a more useful form of the Automatic Identification technologies as there is neither a need of manual contact with a reader nor is there a necessity to be in the line of sight of the reader. Other methods include bar codes, OCR, retinal scanners for security purposes, etc. RFID enables the user to store information which can be further relayed .

Benefits of RFID

RFID technology is beneficial from both security and business point of view. For the customers, RFID is comfortable, networkable and even readers are portable. The technical superiority of RFID leads to all the following benefits  that the device provides.

  • Easy and Fast – Primary benefit of RFID is Material Handling. It makes the process faster and easier. There is a major reduction in the number of steps for processing and storage. In Credit Cards, around 20 % of time is saved in a process by RFID. This is because there is no need to swap cards or sign bills. This increases for RFID in other areas benefits of rfidlike Toll Booth .
  • Low error rates – RFID enhances efficiency of various processes. There is low error generation from the technology due to its easy usage. This leads to cost savings for the user.
  • User Friendly – RFID is user friendly and networked. RFID installation and usage is not difficult for users. It is also easier to read the tags by RFID than by normal Barcode readers.
  • Feedback, Traceability and Visibility – RFIDs can help in generating feedback from users. The technology can be used to gauge the user’s choices through its Visibility. This can be done at the time of purchase after which the tag is removed.  For example, this benefit is useful for brands and companies selling their products. They can efficiently and easily measure the views of consumers.
  • Accurate Inventory and Out of stock conditions prevented-Inventory accuracy is increased multifold times due to RFID. It gives accurate results of the storage provided. Therefore Inventory loses are reduced. Unavailability for various goods is also prevented by RFID. Through there can be direct access to specific information about products and their availability. Forecasting of product’s usage through RFID also leads to reducing such conditions. This increases revenue. This is a major benefit for production places, supermarkets, military, etc. These benefits are the major reasons behind stalwarts like Wal-Mart eying a benefit of $287 million from RFID .
  • Tracking and Securing Goods -Tracking items and increasing security is made possible with RFID. The storing and networking of information through RFID gives it an extra edge. The tags can trigger security alarms if removed. This is a major benefit for libraries, etc. where the stock is easily tracked.
  • Decrease in labor requirements – There is a minimal need of contact and staff. Labor costs are reduced by RFID. Check Stations for tollbooths can be rendered useless once RFID is used.

Limitations of RFID

Till now the major limitation of RFID has been those of cost and reusability issues. These can add up the cost of establishment of this technology where a large number of tags are to be used. The following are major Limitations and the reasons behind such limitations:

  • Recent Technology with low penetration thus High cost -Since RFID technology is relatively new, RFID devices cannot be used everywhere. The technology is still in its early stages. The cost issue is due to the low demand problem. The numbers of RFIDs being used today are not substantial enough for the technology to be made cheap. Demand increase can lead to cost reductions. But then the main reason for not a wide use of RFID is the fact that it is not cheap, thus this leads to a catch-22 situation.
  • Reusability issue – This issue arises when a tag is to be used for another reader used by a different, probably a partner company. The total money spent for RFID is thus based on volumes and reusability. The cost of Active Tags generally costs 25$ and above. Low and High Frequency tags cost a little higher. Passive Tags costs as low as 15 cents in which only a bar code is printed.
  • Security concerns – A shortcoming of RFID today is the fact that the tap and go style of device can be intercepted easily. This is because of the fact that the tags can be read by anyone who possesses a reader.  Therefore it is fairly manageable to hack into the information of the tag.
  • Involuntary Multiple Reading – There is also a possibility of the passive tags being read multiple times by readers. This may lead to inefficiency in data produced by the reader.


RFID is a developing and vast technology. It might take some years but RFID would surely be helpful in many fields apart from the ones RFID is already being used in now.

The benefits of RFID overpower the limitations RFID carries. In 2011 the value of RFID’s Market was $5.84 billion. The growth of RFID has been most rapid in Apparel tagging with around 450 million tags being used in 2011 alone. There are hopes of saving billion dollars in inventories alone through RFID for libraries, museums and supermarkets . Other sources of saving money would be through increasing revenues. This would be due to the sophistication of RFID technology. For example, it has already been seen that the customers increase their purchases through RFID devices like credit cards. The amount of time and money RFID saves is some indication of how useful and promising RFID technology is.