Last Updated Aug 5, 2010 9:25 AM EDT
Walmart's RFID reasoning is smart enough: Like other large stores, Walmart has a hard time tracking its entire inventory. Purchasers will look at a piece of clothing, change their mind and put it in the wrong place, or, more nefariously, walk into the dressing room to try on a pair of shorts and walk out with them. The RFID tags would show where a particular article is at in the store at all times. The RFID is supposed turned off by Walmart at purchase, a la the ink containers that prohibit stealing.
The problem here is that customers may not be aware the RFID is in effect, nor may Walmart cashiers be trained well enough or be vigilant enough to inform the customers of the RFID tag.
First, it is doubtful that Walmart will create a bulletin in the store advising to customers that clothing is being tracked -- despite it being a decent scare tactic like the "Beware of Dog" or "Smile! You're On Camera" signs at convenience stores. Walmart makes its bread in more conservative areas that probably are not on FourSquare and have little to no interest in being tracked while they shop.
Second, as the Miguel Bustillo of the Wall Street Journal notes on Wal-MartmFID, the RFID could be used in conjunction with the new RFID-embedded drivers licenses from Washington, New York and other states to determine when a customers has entered the store and what he or she is purchasing. In nefarious hands, this combined with other data could create a matrix that identifies the person without him or her even knowing it.
Third, the RFID is set to appear on the logo or size tags on the jeans. The tags usually get tossed into the consumer's garbage. Again, with this info in the wrong hands, a perpetrator could see a customers, track his or her purchases (based on the collection of RFID tags) and easily find out where he or she lives.
Finally, there is no guarantee that Walmart will consistently turn off the RFID tag at purchase. The financial model of FourSquare, Facebook and literally hundreds of new media companies is based on observing traffic patterns and purchase behavior. Walmart could easily become more of a snoop than Google (GOOG) doing a Wi-Fi drive-by.
Photo courtesy of Steve Brandon