How RFID could help tackle counterfeiting and grey market diversion

RFID has been around for a while, so why have we not heard of many examples of this technology being used to tackle the issues of counterfeiting and grey market diversion of fast moving consumer goods? Gillian Ewers, VP Marketing at PragmatIC, explores the possible reasons and solutions.

Background

RFID and intelligent electronics have the potential to make a real difference in confronting the challenges posed by counterfeiting and the grey market (the latter is where goods are not counterfeit but are bought in a low-priced country and then sold in another for a much higher price). Whereas counterfeited products are illegal and can be dangerous, it is not illegal to buy from grey market sources, but consumers are often left frustrated when the products come without local language information or a replacement is refused when something is wrong. Unfortunately for the brands, this often results in negative publicity and damage to their reputation and can lead to loss of revenue as dissatisfied consumers vote with their feet after a bad experience. We associate these issues with luxury items, like expensive handbags and perfume, but it is also a problem for many lower cost everyday items: from personal care to food and beverages.

Solution

The simplest option is to add a unique serial number on every product and track that ID throughout the supply chain. This can be done using 2D or 3D barcodes, but the mass, high-speed production of boxes and labels on traditional packaging and printing lines cannot handle individual codes – an investment in digital printers is required. Which is why most existing barcodes are unique only to a particular type of product, not individual items. These barcodes are also visible and can be easily copied by counterfeiters; or in the case of grey market diversion, they will be valid codes anyway. There are proposals to use blockchain and cloud-based services to track goods from manufacture to the end consumer. However, again this may make sense for high value products, but the cost overhead for FMCGs is simply too high. A better solution would be to embed a low-cost RFID inlay into each item, containing a unique ID, if the inlay uses a FlexIC, it would be imperceptible and can only be read using a specially designed low-cost reader. This enables item-level traceability through the distribution supply chain and into the retail environment, giving assurance of the product’s provenance and authenticity.

Next steps

To find out how PragmatIC and its ConnectIC family of flexible integrated circuits are bringing cost-effective, item-level digital traceability to everyday objects go to: www.pragmatic.tech/applications