RFID has the potential to revolutionize the way retailers do business and the way consumers shop as much as the bar code did a generation ago, but it has to be done right, NRF Senior Vice President for Government Affairs Steve Pfister said. NRF has done considerable research into both the technical and policy implications of RFID and stands ready to assist legislators in California or any other state as they work to understand this new technology.

Retailers place the concerns of their customers No. 1 on the priority list, Pfister said. We know that customers want a technology that eliminates empty shelves and scanner accuracy problems and makes it possible to get through the checkout line without unloading your shopping cart or to return a purchase without a receipt. But we also know that customers don’t want to worry that every purchase is being tracked by Big Brother or to think that their privacy has been invaded. We want to make sure that all of these issues are carefully addressed and that the public policy decisions that are made on RFID strike the proper balance.

The technology for RFID is still being refined, NRF Senior Vice President and Chief Information Officer Dave Hogan said. Those of us on the technical side can make RFID do as much or as little as policymakers want, but it’s important to have clear guidance as early on in the process as possible so that research and development can focus on the way this technology will actually be used.

California is often a trend-setting state that others across the nation are quick to follow when legislating on cutting-edge issues, California Retailers Association President William Dombrowski said. As trendsetters, we bear a responsibility to be careful what precedents we said, and to be certain that our decisions have carefully considered all facts, consequences and points of view.

California State Senate Energy, Utilities and Communications Committee Chairwoman Debra Bowen, D-Redondo Beach, has scheduled a hearing on RFID technology before the panel’s Subcommittee on New Technologies. The hearing will be held at 10 a.m. Thursday in Sacramento.

In a joint letter to Bowen, NRF and CRA urged that legislators consider four areas:

Education Consumers need to be educated on the benefits of RFID, such as the ability to make returns without a receipt, to aid law enforcement in the recovery of stolen property, or to aid in the recall of defective or contaminated products.

Notice To gain consumer trust and confidence, standards for RFID must provide notice to consumers about:

RFID’s uses.

How information collected via RFID will be maintained or used.
The choices and benefits available to consumers.
The impact that consumer choices will have.

Choice Policymakers must address options for consumers on whether RFID tags can be turned off after a purchase and how the information they help gather can be used.

Value The wide range of benefits of RFID must actually be delivered to consumers, and retailers need to be able to deploy the technology cost-effectively.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalogue, Internet and independent stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.4 million U.S. retail establishments, more than 20 million employees - about one in five American workers - and 2002 sales of $3.6 trillion. As the industry umbrella group, NRF also represents more than 100 states, national and international retail associations.