dave-mittlemanWal-Mart recently announced that it would begin using advanced electronic ID tags in its underwear and jeans, a move that the company claims will assist in controlling inventory. However, some privacy advocates are worried that the tags will just be another excuse for unscrupulous marketers or criminals to learn more about consumers with a simple scan.

Starting next month, Wal-Mart will place removable “smart tags” on individual garments that can be read with a hand-held scanner. As a result, Wal-Mart workers will instantly be able to know which sizes of jeans need to be restocked—ultimately ensuring that store shelves will always be fully stocked. Naturally, Wal-Mart executives are thrilled over their new ability to sense what products are on the floor with a quick scan. However, while the tags can be removed from clothing and packages, they cannot be turned off, and they are trackable—the primary reason that privacy advocates are so concerned for consumers. Specifically, critics of the new tagging system argue that marketers or even criminals will be able to drive by consumers’ homes, scan their garbage, and discover what they’ve recently purchased. They also worry that retailers will be able to scan customers who carry the new types of personal ID cards as they walk through the store, without their knowledge. Theoretically, retailers could then combine the data from the customers’ ID cards with their credit card information and then know individual identities the next time they stepped into the store.

Wal-Mart won’t say how much it’s spending on the endeavor, nor how much they expect to profit. However, a similar pilot program at American Apparel Inc. in 2007 found that stores with the technology saw sales rise 14.3% compared to stores without the technology. While privacy advocates remain unimpressed and concerned about consumers’ privacy, smart tag advocates hope to expand the tags’ use even further in the future.