Checkpoint Merging EPC, Theft Detection

Checkpoint Systems on Tuesday will introduce a combined tag product, which is designed to deliver EPC inventory and item-level tracking along with EAS anti-theft capabilities. But the move has prompted an unusual amount and diversity of criticism, ranging from privacy and health risk issues to standardization and support for retail returns.

What Checkpoint rolled out on Tuesday—in the backyard of Disneyworld—was a new family of dual-function labels called Evolve. The line appears to be the first product to attempt to merge the inventory and anti-theft measures. The patent-pending line will be Gen2-compliant and will operate in the UHF band of 860 to 960 MHz, but at 8.2 MHz for RF-EAS systems, according to Checkpoint.

But the launch hadn't even happened when critics started circling the wagons this weekend. On the privacy front, consumer advocate author—and vehement anti-RFID leader—Katherine Albrecht sent E-mail to consumers saying the combination is a "consumer privacy nightmare" because it takes a crucial next step in RFID communications, linking the 24-x-7 active anti-theft devices with the item-level tracking capabilities of RFID.

This is all theoretical at this stage because Checkpoint has yet to get any retailers to agree to use the new labels. But Albrecht said her concerns were also tactical. If one manufacturer starts sewing tracking devices in a line of jeans, for example, her organization could boycott that manufacturer. But if Checkpoint is selling these tags to many national retail chains, it's much more
difficult to protest, Albrecht said.

Checkpoint CEO George Off disagreed with the bulk of Albrecht's privacy concerns, but he negated her primary concern by agreeing with what she said was a core goal. "When EPC gets involved, I think consumers have a right to know," Off said in a telephone interview Monday night. "Consumers should be made aware."

The background of EPC puts some of this controversy into context. The core group behind EPC—EPCGlobal—has been pushing Gen2. Part of the history is that several vendors—including Checkpoint, SensorMatic and 3M—were involved and supported an effort to standardize on one anti-theft standard. Procter & Gamble and Gillette, before they merged, were strong supporters of the effort, said Pete Abell, a former RFID analyst for IDC who today runs his own Amherst, NH-based consulting firm called Kaleidoscope Technology Strategy.

The problem is that UHF doesn't work for anti-theft because it's thwarted by metal—such as in the aluminum foil-lined shopping bags that shoplifters are fond of—and liquid. Checkpoint's approach is to piggyback its proprietary approach atop the Gen2 standard. Whether such a move supports the standard or undermines it is a matter of debate.

Checkpoint's Off said he sees this as more of a short-term fix, adding that "I think (Gen2) will evolve into a nice item-level standard."

Abell has other concerns, namely that the always-on 4-watt readers with this package are powerful enough to detect shoplifters using foil-lined bags but they are also powerful enough to cause medical harm.

Abell talks about government safety standards of how long—and how close—employees and customers can be to the readers. "In six minutes, (a worker) is over the OSHA limit," Abell said, adding that baby carriages parked near restrooms that happen to be near backroom readers are also of concern.

"They now have a serious problem at EPCGlobal. They have never thought they would have a human safety issue," Abell said. "This is one of the reasons (the limit is) 2 watts in Europe versus 4 watts here" in the United States.

Greg Buzek, president of the IHL Consulting Group based in Franklin, Tenn. , and a veteran retail tech consultant, said he thinks that what Checkpoint is doing makes sense, but he's not sure they are the best vendor implementation of the idea.

"I have always believed that the every-unit-item RFID would be a marriage of EAS technology and loss prevention technology. However, I am not sold on the Checkpoint approach because there does not appear to be the ability to turn the RFID portion off and then on again if someone wants to make a return," Buzek said. "To turn off the EAS portion of an RF tag, you have to blow the circuit for EAS portion but that would either leave the RFID tag live or turn it completely off--with no option of being turned back on. My opinion is that the accusto-magnetic technology offered by ADT/Tyco would be a superior technology to marry with RFID. That technology can be turned on and off. Thus for retailers, this means that you can turn off both the EAS and RFID at the point of sale as the EAS portion can be used as a switch to turn on and off the RFID tag. The benefit here is that it turns off the tag for a sale, but the tag can be turned back on in the case of a return. This approach could have a very significant impact on return fraud because with the ability to turn the tag on for a return, the retailer can definitively tell whether that product has ever been in its supply chain. That's because every RFID tag has a unique number tracked through the supply chain."

Checkpoint's Off disagreed with Buzek about ADT/Tyco, saying that ADT's technology could also not be reactivated once disrupted.

Regarding the privacy concerns, Buzek and Off saw eye-to-eye. Buzek's dismissed Albrecht's privacy concerns by projecting what would be involved for such a network to actually try and track a consumer.

"The (privacy) argument is completely unfounded. Let's take the case of the items in a single supercenter for one store. That's about 250,000 items. Let's also assume that to track the tags effectively, you need to ping them once a second. Third, let's assume each tag contains 18 bytes of information, which actually is a very low estimate," Buzek said. "For one store alone, that is 4.5-Mbytes per second of data storage, 270-Mbyte per minute, 16.2-GBytes per hour, 388.8-GBytes per day for just one store. You then have storage and network issues both within and external to the store. Let's assume for a moment 2,000 stores. That's 777.6 Terabytes worth of data a day that has to be saved and sent to a headquarters location over a network before you match any customer information to it, let alone query the information."

Other RFID trackers were less excited about the news, mostly because they said the item-level RFID market is so immature right now.

"I don't see this being a huge story. Theft tags aren't terribly new, although it would be convenient for businesses to have one tag to attach instead of two if they want to use RFID," said Jennifer Albornoz Mulligan, an RFID analyst for Forrester Research. "Very few companies at this point are doing item level tagging or even consumer product tagging in a retail situation."

Raghu Das, a prominent RFID analyst in Europe who is with IDTechEx in Cambridge in the UK, echoed Mulligan's take. "It was inevitable at some point that EAS and RFID would be combined as it is here and ultimately EAS will be subsumed by RFID functionality so you have just one tag not two combined into one," Das said, "but that is still some time away as RFID is not anywhere near as robust as EAS is."

Nikki Baird, the executive director of research for analyst firm Retail Systems Alert Group, say this as so expected that she initially said she didn't even recognize the Checkpoint effort as new at all. "That combination of RFID and EAS was inevitable. It was only a matter of time before someone brought it to market, especially since so many people in the industry have been pointing to counterfeiting and management of high-value items as the most solid business cases for item-level RFID," Baird said.