Radio-frequency identification chips (often called RFID tags) are inductively powered chips that can be used in a range of applications from a subsiture for bar codes on supermarket products to identifying lost dogs and cats. It is a tiny, battery-powered electronic device. When the RFID tag is activated, it decodes the incoming message and produces an answer by utilizing the energy of the incoming radio wave to power the chip long enough to answer.

The main applications include: supply chain management, machine-driven payment, access control, counterfeit prevention, airline baggage management and increasingly smart homes and offices. The tags come in a range of formats: a flat, thin, flexible form known as a label. A flat, thin, flexible tag on paper is a ticket. A flat, thin tag embedded in tough plastic is known as a card (just like a credit card). A small tag in a cylindrical glass bead, is often used for applications such as tagging animals.

RFID TAGS add value and accuracy to many applications such as compliance labeling in retail distribution centers, high-speed processes in postal and parcel distribution, manufacturing process control and confirmation, material tracking, airline luggage identification and routing systems, and single-pass multiple item identification.

RFID technology can be used to raise productivity and tracking in discrete and process manufacturing. For RFID applications such as toll collection and vehicle and container tracking, the tags are used again and again for many years. Key applications are payment systems (such as toll collection systems), access control and asset tracking. Active and semi-passive rfid tags are useful for tracking high-value goods that need to be read over long ranges, such as railroad cars, but these cost more than passive tags, so they are uneconomical on low-cost items.

RFID tags can be tracked easily which has privacy implications. Some civil liberties groups are worried about RFID technology being utilized to invade people’s privacy. There is concern that RFID tags can enable unethical individuals accumulate information on people without their approval or even knowledge.

RFID tag technology, as a replacement to bar code technology, identifies tagged items over wireless communication between an electronic reader and tags containing data on microprocessor chips. However a key disadvantage of a passive rfid tag is that the tag can be read only at short distances, typically only a few feet.