Is RFID the Answer for Return Scams?

Nov 30, 2004

By George Anderson

David Cox, founder and chief executive of Bar Code Security Systems says “it’s just too easy” to purchase items at a discount in a retail store and then return them elsewhere
for a store credit or refund at a higher price.

Mr. Cox knows this, he told RFID Journal, because he knew of a college classmate who allegedly paid his tuition using this very scam.

His former classmate’s alleged illegal behavior gave Mr. Cox some moneymaking ideas of his own.

According to RFID Journal, Mr. Cox’s company is currently working on a radio frequency identification (RFID) tag system dubbed “To Catch A Thief” that uses an encrypted 18-digit ID with a five-digit product identifier to prevent thieves from swapping tags on items, as well as confirming whether an item was purchased at the store.

Mr. Cox said the RFID tags his system will use will not contain any personal data about the purchaser such as credit card information. This should offset any potential privacy concerns. In fact, because the system places the burden of proof of purchase on the item rather than the individual, Mr. Cox believes it will reduce the chance of a customer feeling as though they are being unfairly singled out for reasons such as race. As an African-American, Mr. Cox said he is sensitive to this issue.

Moderator’s Comment: Is radio frequency identification (RFID) technology the answer to ending return scams? Do you think the retail industry needs to
develop a “returns” system that puts the burden of proof that a product was purchased on the item rather than the individual?

David Cox told RFID Journal that he hopes to begin pilot tests of his system with retail partners soon.
George Anderson – Moderator

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