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Unlike bar codes, which must be passed in front of a scanner, RFID tags can be read remotely by a device in the vicinity, sharply reducing time and labor needed to take inventory and letting stores more quickly recognize when stocks are low. By some estimates, retailers lose 4 percent in sales because they are out of what consumers are looking for.
Early this month, Reston-based Accenture LLP won a contract worth as much as $10 billion from the Department of Homeland Security that will include using RFID at U.S. border checkpoints.
One California company has developed a soap dispenser capable of reading employee tags to let restaurant managers know whether their workers washed their hands while in the bathroom.
But RFID initiatives alarm privacy advocates, as well as some federal government officials and state legislatures, who understand the benefits but worry about the possibility of abuse in the tracking of goods and people.