WHENEVER YOU TALK to people about radio frequency identification (fondly known as RFID), they always start by saying, "This is actually a really old technology." RFID was invented about three decades ago, but apparently its time has come.

RFID tech consists of two parts: a tag and a reader. The tag is a microchip with a teensy antenna on it that talks to the reader, which is a small device that takes whatever data the tag sends it and passes it along to a computer. If your RFID tag is in a piece of hospital equipment, for example, the reader might "talk" to it and tell a database, "The machine that goes ping is in room seven." Then any hospital staff who queried the database would know exactly where to get the machine that goes ping.

RFID isn't some kind of wacky technology of the future, either. You may actually already be using it in your car if you have one of those devices that send out a signal and debit your bank account when you drive through a tollbooth. Cities like Boston, San Francisco, and New York are making their toll booths compatible with RFID systems like E-ZPass and FasTrack.

But the most promising applications for RFID systems are in retail. And this is what groups like the Auto-ID Center at the Massachusetts Institute of Technology are banking on. Like a handful of other research and development outfits, Auto-ID is hoping stores will adopt RFID as the ultimate inventory tool and a safeguard against theft. With readers on every shelf, you could know every time someone removed a box of Wheaties from aisle 10. Potentially, every object in a store could have its own RFID the same way they all have bar codes now. But unlike bar codes, RFIDs can be read at a distance, and each tag has a unique identifier.

For privacy advocates, the idea of having a unique identifier on everything they buy is a nightmare. If RFID readers become ubiquitous – which RFID manufacturers bet they will – it could mean that every time you pass by a reader, it could "talk" to your sweater and shoes. Match up credit card records with your sweater's ID and presto: it's a system for monitoring your every move.

Harvard psychology graduate student Katherine Albrecht has formed a group, Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN), that's devoted to fighting companies that want to put RFID tags in their products(www.nocards.org). Her most recent target was Benetton, the Italian clothing manufacturer, whose executives announced they would be putting the tags in their merchandise. After threatening a "Boycott Benetton" campaign, CASPIAN supporters were elated to hear the company had withdrawn its promise to use RFID – at least for now. Meanwhile, Prada already uses RFID for merchandise in its SoHo store in New York.

The question is, are RFIDs all nastiness with no killer app? Simson Garfinkel, a computer security expert and consultant with Auto-ID, says the technology will serve a useful purpose. He argues that the chips can be programmed with "kill code," or a single command to die. Sanjay Sarma, a professor of mechanical engineering at MIT and cofounder of Auto-ID, suggests stores might send RFID tags these kill codes at the point of purchase so that the devices would not be used for tracking. Garfinkel adds that one could be even more clever and just kill the RFID's unique identifier. Keeping other identifiers in the chip, such as what the item is, could be useful for people who are blind and want to use a reader to identify medicines in their cabinet. RFID tags could also aid robots in sorting recycled materials, or people who want to ping their refrigerators to find out if they need to pick up some milk.

Both Garfinkel and Sarma are quick to point out that Auto-ID has a committee of advisors who are researching the potential abuses of RFID, as well as exploring ways of getting the industry to deploy it in a manner that preserves privacy rights. Sarma recently published a paper (www.rsasecurity.com/rsalabs/cryptobytes/CryptoBytes_March_2003_lowres.pdf) in which he and his coauthors painstakingly detail all of the ways RFID could lead to privacy and security violations. Of course, not all RFID developers may be quite as concerned with civil liberties as the researchers at Auto-ID are. Intermec, the company whose IntelliTag RFID system was slated for Benetton shirts everywhere, makes no mention of privacy concerns in any of its four white papers on RFID and related technologies.