Death sticks and taxes: RFID tagging of cigarettes

Abstract

Purpose

The purpose of this paper it to examine the potential for radio frequency identification (RFID) to be used to tag packs, cartons and cases of cigarettes, both to combat the fast‐growing, global problem of cigarette smuggling and to provide tobacco companies and retailers with better inventory control and business intelligence.

Design/methodology/approach

The paper begins with an overview of RFID technology and its applicability to product identification. It then looks at the issues involved with contraband cigarettes, both in the USA and on a global scale, examining the impact of smuggled cigarettes on both tax revenues and public health. With the growth of online cigarette sales and sales by Native American tribes, the problem continues to escalate in scope. The paper then examines the technological and political issues involved – and potential benefits of – using RFID track and trace capabilities with cigarettes, looking at early efforts to accomplish just that goal.

Findings

It was found that RFID is an appropriate technological answer for the seemingly intractable problem of contraband cigarettes.

Practical implications

The paper highlights the importance of implementing a technological solution to the problem of cigarette smuggling. It provides a framework for the cost‐effective use of RFID in this area and the potential for reducing contraband cigarettes, increasing tax revenues, and decreasing youth smoking.

Originality/value

The paper is original in that it lays out a market‐based case for the use of RFID to combat cigarette smuggling, giving credence to the calls of governments around the world and the WHO to better use technology to reduce the smuggling problem.

Citation

Wyld, D.C. (2008), "Death sticks and taxes: RFID tagging of cigarettes", International Journal of Retail & Distribution Management, Vol. 36 No. 7, pp. 571-582. https://doi.org/10.1108/09590550810880598