RFID vs. Barcodes: How to Leverage the Advantages of Each to Grow Your Business

RFID vs. Barcodes: How to Leverage the Advantages of Each to Grow Your Business

RFID vs barcode

RFID and barcode technologies have a lot in common.

Both accomplish the following things for eCommerce businesses and warehouses:

  • They replace manual pen and paper processes in inventory management
  • They help mitigate against theft, obsolescence and disorganization
  • They reduce or eliminate human data entry errors

So why use one over the other? What exactly do they do, and how should a modern eCommerce operation think through which to implement (or not implement)?

The short and simple answer is that barcoding is an elegant solution for efficiency and accuracy. RFID technology is more about automation and bulk inventory control. 

Both are excellent tools and serve different purposes in the context of inventory management.

By the end of this post, you’ll understand:

  • The key differences between RFID and barcodes
  • The pros and cons of each technology
  • How to choose which to use in your eCommerce business

What is RFID?

Radio Frequency-Identification (RFID) is a scanning technology that uses radio waves to read and write information on special tags affixed to products. These tags come in different shapes and sizes but all contain a chip that can read and write 2,000+ bytes of data.

Many US cities utilize RFID tags to streamline toll collection for highway commuters. If you’ve got a transponder affixed to your windshield, you’re a beneficiary of RFID tech. 

Every time you pass under or through a toll road checkpoint, the scanner picks up your transponder and debits your toll account, saving you the hassle of stopping to pay for tolls at the window.

Like barcodes, RFID tags are scanned with a simple scanner. However, RFID is a near-field technology. Near-field scanning means that rather than needing a direct line of sight (such as with barcodes), you can simply move the scanner in the general vicinity of the tags to scan them.

What are Barcodes?

A barcode is a machine-readable code in the form of numbers and patterns of parallel lines of varying widths printed onto a product for identification.

Barcodes are probably the most durable form of inventory management technology. It’s astounding that a technology invented in the 1950s is still going strong today.

Barcodes, unlike RFID tags, are printable by any standard desktop printer. Their ubiquity with consumers makes them a safe and unobtrusive choice for product identification.

While RFID scanners use radio waves to transmit tag information to the scanner, barcode scanners use a beam of light to read the printed pattern.

It should be noted that many modern scanners have an option for both barcode scanning and RFID scanning. Two separate scanners shouldn’t be necessary. 

Just because barcoding is older than most people doesn’t mean innovators haven’t improved the technology. One form of barcode that’s experienced quite the comeback in 2020 and 2021 is the QR code.

The QR code — often spotted in restaurants and bars in lieu of menus during the pandemic — is a square, geometric symbol scannable by all modern mobile phones. 

The barcode is a flexible, approachable scanning solution. But it’s not without its disadvantages. The next sections will help you decide which of these technologies is best suited for your inventory management workflow. 

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Warehouse worker crouching down and checking boxes on shelves with scanner. Female worker scanning boxes in rack.

Advantages of Barcodes

Barcodes are Everywhere

Barcodes are probably the universal technology in all of retail. Any semi-successful retail operation will have the means to scan, generate, and print barcodes — especially if they’re importing and storing product from distributors. 

The same is not always true of RFID technology. 

Consumers come to expect them on everything they buy, from cans of soup to propane grills to personal electronics. Businesses that use barcodes need not worry about a lack of compatibility with other systems — barcoding is the standard. 

Barcodes are Far More Cost-effective Than RFID Tech

Setting up an RFID infrastructure, purchasing all the physical tags and technology, and affixing the tags to products is an expensive undertaking — both in time and dollars.

Barcodes are a more financially approachable solution, especially for businesses that need a quick and easy way to track products. All you really need to get started with barcoding is:

  • A way to generate barcodes (we’d recommend an inventory management system to keep everything in one place)
  • A printer
  • A scanner
  • A place to transmit the scanned information (again, your inventory management system)

If you’ve already got a solid IMS up and running, you could theoretically have a functional barcoding system for around $150-200. 

After that, your costs are simply your printer ink and paper. It’s no wonder barcodes are so universal!

Barcodes are Durable 

The transit process can sometimes expose products to harsh conditions — things like temperature changes, humidity, spills, or handling damage.

This can be a problem for RFID tags. Condensation (or proximity to any liquid) can cause a tag to perform poorly or stop functioning altogether.

Barcodes, by merit of the fact that they’re simple black and white patterns, are much more durable and less likely to cause scanning failures.

Barcodes are Accurate

RFID scanning is far more convenient than barcode scanning. But what you gain in convenience, you often lose in accuracy.

Because RFID uses near-field technology, scanning just one item — and not the items around it — is almost impossible with an RFID scanner.

This would require turning the RFID sensitivity low and getting very close to the product. The whole point of RFID technology is speed and automation. So getting close to an accurate RFID scan is no better than barcoding — it’s just more expensive. 

Barcodes work with the same accuracy regardless of what materials they’re printed on. They’re also well-suited for pickers or warehouse employees who need to scan single products while not scanning nearby items. 

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Advantages of RFID

RFID Tags are More Secure

The simplicity of barcodes has a few downsides. For one, barcodes are very easy to forge. If security or privacy of any kind is an issue, RFID is the way to go.

RFID tags can not only contain encrypted data (thanks to their higher data capacity), but can also be hidden inside items during the transit process. This keeps them safe from bad actors internally while maintaining their intended function.

RFID Tags Can Store Complex Product Information

Thanks again to their data capacity, RFID tags can store more than just the standard SKU or serial information.

(By the way, 2,000 bytes is really only .002 megabytes. This may not seem like a lot, but when you’re ordering tens of thousands of RFID tags, any more data capacity than that would get very expensive very fast.)

RFID tags can store things like lot or group numbers, manufacturing dates, manufacturing locations, assembly instructions, or other text-based information. 

RFID Tags are More Flexible

While barcodes require a very close, line-of-sight scan, scanners can pick up RFID tags from long distances — sometimes up to 300 feet away. 

Further, RFID scanners don’t need to be in the line of sight to pick up tags, and scanners can grab data from up to 100 tags simultaneously. That’s a far cry from the one-by-one scanning limitations of barcodes.

Here’s where the automation comes in. You know those anti-theft tags on clothing items in department stores? An alarm goes off if the tag passes through the RFID scanner station at the store’s entrance. 

This entire system doesn’t require a human at all (except for the security guard that comes barreling toward you when the alarm sounds). 

You can apply the same logic to your warehousing strategy. Imagine this: rather than scanning each item one by one, you simply pass all your product through an RFID scanning station. In seconds, all your inventory is imported into your IMS and ready for storage.

Then, when you pick and pack products, you do the same thing in reverse. You move completed orders through the station and your IMS marks them as processed and shipped. The automation possibilities, especially for growing eCommerce businesses, are endless. 

RFID Tags are Faster

RFID scanning is often substantially faster than barcode scanning, especially when moving products in bulk. For example, if you’re importing large amounts of the same product into your warehouse, you can cut your scanning and ingestion time by significant margins. 

To demonstrate this, watch this video of a gentleman scanning the same items using both barcodes and RFID tags. The barcode scan takes about a minute, while the RFID scan takes 3 seconds. Now multiply that by several employees and multiple daily deliveries, and you can begin to see the time-saving potential of RFID technology.

A Real-world Example of RFID 

Let’s say you’re a clothing retailer with a moderately large warehouse. You specialize in selling streetwear shirts of varying designs that come in similar packaging.

Your receiving process is taking way too long and you’re looking for opportunities to automate your workflow.

You set up a system to receive shirts by the pallet with individual RFID tags affixed to each box. Rather than using a line-of-sight barcode reader, you can simply pass the pallets through a stationary RFID scanner (or use a handheld scanner) and input all your inventory data into your IMS in a fraction of the time.

For even larger operations, RFID works perfectly for automatic shipment validation. Once an employee picks and packs an order, it can pass through a scanning station (either manually or via conveyor belt), as an extra quality control checkpoint. 

Incorrect orders can be flagged and corrected (so long as you have a compatible IMS that supports quality control). 

A Real-world Example of Barcoding

Now imagine you’re a small personal electronics retailer and repair shop. You have an eCommerce store on your site as well as a brick-and-mortar location where you sell mobile phones, laptops, and tablets. 

Your storage area consists of a single room in the back of your storefront. You don’t do a whole lot of receiving, and all of your products are stored together. Further, each product is different from the ones around it.

For this reason, RFID technology would be an impractical choice. You’re not interested in scanning multiple items simultaneously, but single items with accuracy.

Barcoding is not only the most cost-effective way to manage inventory, but offers the simplicity and efficiency needed for such a variance of products. 

Barcoding or RFID: What’s Right for my Business?

You will encounter claims that RFID tags are the future, and the barcode’s days are numbered. You’ll also encounter folks who say the barcode is the only way to go for inventory management. 

There’s no doubt that RFID is a more robust technology. But that’s not the point. The point is to choose a technology that works for your business and solves your particular pain points.

When to Choose an RFID vs. Barcoding

You may be well-suited to an RFID scanning solution if any of these resonate with you:

  • You often need to scan all your items at once
  • You import, store, and ship many similar items in bulk
  • You’re finding that barcode scanning is too slow and want to streamline your processes
  • You’d like to explore automating more of your scanning tasks
  • You have capital to invest in more complex solution
  • You’re a mid- to large-sized business

Conversely, a barcode system may be your best bet if any of these sound like you:

  • You often scan single items that don’t necessitate speed or complex information
  • You store your items close to one another and want to avoid cross-scanning errors
  • You’re a startup or growth-sized eCommerce business
  • You need a simple, cheap, universal solution to get started with scanning

Perhaps you’re a mid-to-large-sized business and automation is your main priority. You’re outgrowing your current systems and need a faster, more streamlined way to scan and move products. RFID may be the perfect fit.

Or maybe you’re a small, artisan eCommerce shop with a few very particular SKUs. In that case, barcoding is not only more fiscally responsible but better suited to the kind of accurate, single-item scanning you need.

The most important thing is not whether you choose RFID or barcoding, but that you have a dedicated, flexible inventory management system to accommodate your business and reach your goals.

SkuVault not only supports RFID and barcode scanning, but has a full suite of tools — including forecasting, reorder point reminders, and supply chain management — to help your business grow and thrive. 

To learn more about the specifics of how SkuVault can help your business, schedule a live demo today. 

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