A new and very simple design could solve privacy concerns with RFID tags. The new tags will have a perforated edge that allows consumers to tear off a part of the antenna after purchasing an item and immediately reduce the distance of the signal.

Ultra-high frequency RFID tags are generally readable at distances up to 30 feet (9 meters), but the Clipped Tag, invented by IBM researcher Paul Moskowitz, reduces that distance to between 1 and 2 inches. "This means that the tag can only be read if the consumer holds the tag up to a reader," said Moskowitz. "It puts choice in the hands of the consumer."

Numerous retailers, including Marks and Spencer in the UK, Germany's Metro and Wal-Mart in the US, view RFID as a way to manage the huge flow of merchandise in and out of stores more effectively, while at the same time reducing inventory losses and labor costs. But privacy and civil liberties advocates worry that the smart tag technology could create an Orwellian world in which sales clerks or law enforcement officials could remotely read a handbag's contents or track a consumer's whereabouts.

Technology is afoot to deactivate tags permanently, such as the EPCglobal Gen2 "kill" command, but systems like these also have some disadvantages. Data in killed tags can't be retrieved, posing a problem for product recalls or returns.

With Clipped Tag technology, the data remains intact but its remote readability is dramatically reduced.

The tag will have a small notch: to turn the long-range RFID chip into a short-range one, the customer simply tears along the perforated edge and removes a portion of the antenna. It's as simple as that. What's more: "You have a visible indication that you have altered the tag," said Moskowitz.

IBM has tested the commercial adaptability of the Clipped Tag system with Marnlen Management, which manufacturers RFID labels, and Printronix, a producer of printing systems.