The stage is set for the next great privacy battle. But it’s not with a social-networking site like Facebook or an Internet giant like Google — it’s with our old corporate enemy: Wal-Mart.

With massive inventory in the nearly four-thousand Wal-Mart stores across the country, it should come as no surprise that managing all those cheap goods is a recurring problem. Various technological measures have been tested through the years to try and keep a close watch on inventory and prevent theft. Some have worked better than others — who hasn’t walked out of a store and heard the shrill beep of the electronic scanner when the salesperson forgot to remove the security tag?

Currently, most retailers stick with the traditional UPC barcodes to keep track of merchandise, even though more sophisticated tracking methods have been around for some time. Until now, the majority of retailers have used Radio Frequency Identification tags (RFID) only to track their merchandise through the supply chain, and not for individual items. These “smart tags” store unique numerical identification codes that can be scanned from a short distance away by a hand-held wand.

Wal-Mart is testing whether these radio tags can serve a better function than simply tracking shipments. Starting August 1st, the retail giant will begin using these removable “smart tags” to track individual garments. The widespread adoption of these tags will be the largest in the world, and is likely to inspire other retail stores to follow suit. The new tags will surely provide some tangible benefits. For example, employees will be able to quickly learn if a certain size of Wrangler jeans is missing, or what types of underwear are flying off the shelves. The alleged aim of using the new tags is to ensure the shelves are optimally stocked to cater to consumer preferences, as well as to help prevent theft. “This ability to wave the wand and have a sense of all the products that are on the floor or in the back room in seconds is something that we feel can really transform our business,” said Raul Vazquez, the executive in charge of Wal-Mart stores in the western U.S. Sounds pretty good, right?

Well, some aren’t so sure.

Privacy advocates have raised concerns about the new technology and it’s implications for security and individual privacy. For example, while the tags are removable from the items they are attached to, they cannot be turned off, and are trackable. This leads some consumers to fear that criminals and scam artists will be able to track their purchases by simply driving by and scanning discarded tags in garbage cans. An additional concern involves the risk of the potential theft of personal information contained on personal ID cards. Several states, including New York and Washington, have begun to issue driver’s licenses that contain RFID tags with unique ID numbers to make border-crossings easier for travelers. Some privacy advocates fear that retailers could theoretically scan customers carrying such licenses as they make purchases, and combine that information with their credit card data.

There are two things you really don’t want to tag, clothing and identity documents, and ironically that’s where we are seeing adoption. The inventory guys may be in the dark about this, but there are a lot of corporate marketers who are interested in tracking people as they walk sales floors,

said Katherine Albrecht, founder of a group called Consumers Against Supermarket Privacy Invasion and Numbering and author of a book called “Spychips” that argues against RFID technology.

Many of these concerns seem far-fetched and overstated, and smart-tag experts have dismissed the Big Brother accusations as “breathless conjecture.” Still, pressure from consumer groups has apparently swayed Wal-Mart to approach with caution. To help minimize consumer fears of the tags being used to track people’s movements, Wal-Mart has instructed suppliers to add the tags to removable labels or packaging instead of embedding them in the product itself, and is posting large signs to alert shoppers to the change.

Despite early protests, Wal-Mart is optimistic about expanded use of the technology in the future. Aside from more efficient retail management practices and loss prevention, RFID tags could eventually eliminate the need for check-out lines — a practice already heartily helpful at grocery stores. In any case, the speculative privacy concerns put forth by consumer groups seem insignificant when compared to the more prominent and prevalent privacy breaches seen on the Internet on sites like Facebook and Twitter.

For now, consumer groups are likely to keep the litigation docket full with cases against those entities, and not worry as much about a little tag on a shirt picked up by one of the People of Wal-Mart.

Lauren Kilgore

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