AML Blog - The Scan

RFID vs. Barcode: Which Will Work Best In Your Warehouse?

Today, access to technology has led many warehouses to outgrow their old, manual procedures. To upgrade their data entry processes and improve efficiency, they are turning to two distinct technologies: barcode or RFID (radio frequency identification).

Although the two technologies share similar functionalities, they are quite different in the way they work in today’s warehouses. To read a barcode label, the user must position the scanner within line of sight of the item. To read an RFID tag, the tag simply needs to be within range of the reader. According to RFID Journal, an RFID tag’s read range is usually 20 to 30 feet under ideal conditions. With that in mind, it is important to understand that while RFID technology is ideal in some environments, it is not necessarily ideal for all.

For most companies, transitioning from manual data entry to barcode technology is a natural progression – not to mention cost-effective. Those considering RFID technology should weigh these factors to determine whether or not it will generate a return on their investment in the long run.

Warehouse/Inventory Size

When considering the two technologies, factor in the size and scope of your warehouse. Specifically, are employees able to read or scan items within the line of sight? In small to medium-sized warehouses, RFID technology is not necessarily needed simply because being within the line of sight of an inventory item is not as difficult as it is in a larger warehouse. In larger settings, scanning each item in a vast inventory requires a large number of time and resources.

In general, how large is your inventory? More specifically, consider the size and price of each of your items. Consider how much it would cost to replace a misplaced item. For example, large and expensive items like TVs would require more heightened security and tracking capabilities than a small plastic toy. From a cost standpoint, it makes more sense to use RFID tags for high-ticket items. It is not always economically feasible for many warehouses to put an RFID tag on each of their inventory items.


Consider the conditions of your warehouse. Do your inventory items often come into contact with extreme temperatures, extremely sharp objects or liquids? RFID tags are usually applied with strong adhesives and protected in special coatings or plastic coverings, making them ideal for withstanding harsh conditions. That being said, extreme conditions are not very common in the warehouse setting, and inventory is seldom exposed to freezing temperatures or significant water damage.


Barcode labels are a universal technology in the retail, food and beverage industries and can be processed anywhere in the world. Unlike RFID tags, barcode labels can be generated and distributed electronically, allowing recipients to print or display them. They have been used to ship and sell products for years and are found on almost every item, therefore both warehouse employees and consumers alike are familiar with them. Implementing RFID technology would mean spending time and labor to train each of your employees. You wouldn’t be able to reap the benefits right away; there would be a learning process.

Not to mention, compatibility is necessary for international trade. Currently, frequencies used for UHF RFID in the U.S. are not compatible with those used in Europe or Japan.

Cost Constraints

The main consideration in this debate is cost. Purchasing an RFID system is expensive, so implementing one where it isn’t necessary would be a significant waste of time, money and resources. Warehouse managers must make sure that they have the budget and human capital to carry it out.

Ultra-high frequency (UHF) readers range in price from $500 to $3,000, depending on their functionality. An active RFID tag can cost from $10 to $50 or more depending on the size of the included battery, the amount of memory on the microchip and the packaging around the transponder.

Imagine paying $50 for each active RFID tag for 1,000 inventory items, as well as $3,000 for each reader for 100 employees – not including the labor money spent on implementing the system and training each employee to use the technology. In contrast, barcode labels cost usually cost less than a dollar and even high-end barcode readers only cost about $1,000.

When your company is making a purchasing decision, be sure the data collection system – whether RFID or barcode – will offer maximum value and minimum disruption to your operations.

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