Sam’s Club RFID Fines

Beyond WiFi, one of my interests lies in RFID, another wireless technology.  I ran across this interesting story at RFID Update.

Nearly a year ago, Sam’s Club sent some of their suppliers a letter ( dated January 7th, 2008 ) requiring RFID tagging of shipments to the DeSoto, Texas distribution center by January 31st, 2008. In the letter, Sam Club outlined fines of $2 to $3 per each non-tagged pallet.

Additionally, Sam’s Club is requiring tagging at the case level to all distribution centers by October 31, 2009 and at the item level by October 31, 2010

Have you heard of a company that received a fine after last year’s deadline? Is this a program that is “all bark, and no bite”?

Is Wal-Mart trying to pass along the additional cost of handling non RFID tagged goods? It seems that it would be equally effective for Wal-Mart to negotiate different purchase prices with suppliers who do not implement RFID tagging. I would be interested to hear Wal-Mart’s reasoning behind the fines in lieu of their other options. After all, what happens to suppliers who chose not to pay fines?

This story is interesting to me from the stand point that it seems to further the precedence for one business to fine another, rather than fines being levied by government or other regulatory bodies. Did this trend start with the Payment Card Industry? The PCI framework allows banks to fine institutions for non-compliance with their Data Security Standard, which is meant to protect card holder data.

What do you think about the situation?

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