Radio frequency identification (RFID) technology is not being used to its full potential, according to research published this week.

The 2005 Consumer Packaging Report argues that RFID has so far only scratched the surface of its capabilities, with use limited to internal tracking projects.

Privacy concerns are hindering the full exploitation of RFID’s potential to improve consumer safety and service radically, says the research.

Felix Helander, business intelligence director at Rexam, the consumer packaging manufacturer that commissioned the research, says RFID will make industries that are testing the technology more accountable to their customers, and will improve consumer safety.

‘We believe that, far from being a threat to consumer privacy, RFID presents a wealth of opportunities for retailers and brand owners to meet customer needs and concerns,’ he said.

Raghu Das, author of the report and managing director at analyst IDTechEx, said: ‘Industries should think about using RFID to add consumer value as opposed to enhancing value in the supply chain. This will ultimately be more valuable.’

Das says that the quality assurance offered by RFID tagging could be used to achieve competitive advantage.

For example, when scanned, product packaging could show information for customers, such as highlighting allergy-inducing ingredients or dangerous drug combinations.