But Levi Strauss & Co., which is testing radio-frequency identification chips to track inventory in two of its Mexican franchise stores and at another unnamed retail customer, says it's being entirely transparent with consumers about the tags and their use.
One U.S. retail store
The chips are being used on removable hang tags in "a few select men's products" in the core Levi's apparel brand in one U.S. retail store, which has asked that it not be named until it chooses to identify itself, said Jeffrey Beckman, director of worldwide and U.S. communications for Levi Strauss.
That the chips are being used on the core brand would indicate a department or specialty store is the site. Wal-Mart Stores, one of the prime retail movers for RFID adoption in mass retail, carries the Levi's Signature but not the Levi's core brand.
"It is by their standards a small test," Mr. Beckman said, adding that the retailer has asked Levi's to leave any announcement of its test to the chain.
Retailer Benetton ended a test of RFID chips in its retail line in 2003 after the group Consumers Against Privacy Invasion and Numbering (CASPIAN) launched a boycott. In a statement yesterday, the group said "it may be time to ditch your Dockers and lay off the Levi's" because the company isn't honoring CASPIAN's moratorium on item-level RFID tagging, but did not call for a boycott.
'Floodgates will open'
"Companies like Levi Strauss are painting their RFID trials as innocuous," CASPIAN founder Katherine Albrecht said in the statement. But she said "once clothing manufacturers begin applying RFID to hang tags, the floodgates will open and we'll soon find these things sewn into the hem of our jeans. ... The problem with RFID is that it's tracking technology, plain and simple."
CASPIAN says numerous patents by RFID technology developers describe ways to link unique serial numbers on RFID-tagged items and track consumers for marketing or advertising purposes. The group cites an IBM patent describing how RFID tags could be used by the government to track individuals in public places.
"There's no intention whatsoever to embed these [RFID chips] in products," Mr. Beckman said. And he said Levi Strauss has no current plans to use RFID for marketing applications.
"Right now, this is completely about managing inventory and being in stock on products," Mr. Beckman said. "Things could change, but right now this franchisee's entire focus is on improving inventory management."
He said the Levi's franchisee using the tags at one Mexican Levi's and another Mexican Dockers outlet has been "very transparent" with consumers by posting signs in stores telling about the RFID tags and putting disclosure on the removable 2-inch by 4-inch tags on garments.
The tags read "RFID inventory control tag," Mr. Beckman said, and describe the technology as "functioning like an intelligent bar code" aimed at improving product availability. He acknowledged that the tags do track individual serial numbers for each garment, but said the tags add: "Please discard this tag if it is not removed at the point of purchase."