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The concern with the tags is that while they can be removed when someone takes a purchase home, they can't be simply deactivated by consumers - meaning that they can still be tracked. On top of the tags being worrisome, the systems used to read them in stores are also raising eyebrows:
[Privacy advocates]also worry that retailers will be able to scan customers who carry new types of personal ID cards as they walk through a store, without their knowledge. Several states, including Washington and New York, have begun issuing enhanced driver's licenses that contain radio- frequency tags with unique ID numbers, to make border crossings easier for frequent travelers. Some privacy advocates contend that retailers could theoretically scan people with such licenses as they make purchases, combine the info with their credit card data, and then know the person's identity the next time they stepped into the store.
The whole idea seems a bit awkward, but then again: It's not really any worse than creepy men putting GPS-tracking systems in their lovers' lingerie. [WSJ]