Lowe’s Uses RFID, Blockchain to Fight Retail Theft

4 January 2023Oath. Note: This article was previously posted on Retail touch points.

Lowe’s has unveiled a new solution developed in its Innovation Labs division, designed to combat retail theft in a way that is invisible to customers, through the use of radio frequency identification (RFID) tags and the blockchain. The new technology, known as Project Unlock, combines low-cost RFID tags and Internet of Things (IoT) sensors to activate power tools at the point of purchase, while creating a secure, publicly accessible and anonymized record of legitimate purchases on the blockchain.

Organized retail crime has been on the rise since 2020, costing retailers an average of $700,000 per $1 billion in sales, according to the National Retail Federation. Solutions until now have typically involved unlocking valuable items, but Lowe’s new technology could allow the company to ditch the padlocks and shelf gates.

Visualization of how Project Unlock RFID tags will work.

Project Unlock has two interconnected solutions. The first is product activation at the point of sale (POS) where only products that have been legally purchased are activated. This means that if a power tool is stolen, it will not work. The POS activation is powered by an RFID chip embedded in the product by the manufacturer and pre-loaded with each item’s unique serial number. That serial number is also embedded in the box’s barcode, and the product is set to “unusable.” When the barcode is scanned at the register, it is activated for use.

The second part of the solution is a transparent record of purchase to help retailers, manufacturers and law enforcement authenticate and validate ownership. When a customer buys a product, it is recorded in the blockchain, after which these records, which do not contain personal customer information, can be checked by anyone. For example, marketplaces and other retailers can check a record to make sure they are not buying a stolen item. To make this work, a unique non-fungible token (NFT) is created for each physical product.

Initially, Project Unlock will be deployed in Lowe’s stores across its range of power tools to provide proof of concept, but a Lowe’s spokesperson said the company “sees potential to use this invisible blockchain and RFID system for other items in stores and across the entire retail ecosystem.” In a video demonstrating the new technology, Lowe’s explained: “It’s our job to make sure customers experience as little friction as possible – that’s why we’re so concerned about retail theft and committed to preventing it. We see a future there technologies like Project Unlock can help the entire retail ecosystem create a great environment for our customers.”