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Abstract

In today’s global competitive environment, organizations face a variety of challenges. Continuous improvement in organizational efficiencies and improving the entire supply chain are necessary to stay competitive. Many organizations are adopting radio frequency identification technologies (RFID) as part of their information supply chains. These technologies provide many benefits to the organizations that use them. However, how these technologies affect the consumer and their willingness to adopt the technology is often overlooked.

Many of these RFID tags remain active after the consumers purchase them. These RFID tags, placed in a product for one purpose and left in the product after the tags have served their purpose, are residual RFIDs. Residual RFID technology can have many positive and negative effects on consumers’ willingness to buy and use products containing RFID, and thus, on the business’s ability to sell products containing RFID. If consumers refuse to buy products with residual RFID tags in them, the business harm is greater than the business benefit, regardless of any gain in supply chain efficiency.

In this study, we outline some of the advantages and disadvantages of Residual RFID from the consumer perspective, then follow up with an in depth survey and analysis of consumer perceptions. Using structural equation modeling (SEM) we demonstrate that consumers’ perceptions of privacy risk likelihood and privacy risk harm negatively impact their intentions to use this technology. The implications of these findings need to be considered before the pending implementation of residual RFID technologies in the supply chain on a mass scale.

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