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Unlike a barcode, the tag does not need to be within the line of sight of the reader, so it may be embedded in the tracked object.

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Active tags are powered by a battery and thus can be read at a greater range from the RFID reader, up to hundreds of meters. Passive tags are powered by energy from the RFID reader's interrogating radio waves.

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This number can be used to track inventory goods. When triggered by an electromagnetic interrogation pulse from a nearby RFID reader device, the tag transmits digital data, usually an identifying inventory number, back to the reader. An RFID system consists of a tiny radio transponder, a radio receiver and transmitter. Radio-frequency identification ( RFID) uses electromagnetic fields to automatically identify and track tags attached to objects.

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