How Do Walmart Tags Work?

A Walmart associate scans a rack of jeans, and within seconds, the price updates across 120,000 products in the store without touching a single paper label. Meanwhile, a tagged shirt passes through exit sensors, triggering an alarm if unpaid. These scenarios happen thousands of times daily across Walmart’s 4,600 U.S. locations, powered by an interconnected tag ecosystem most shoppers never fully understand. Walmart operates four distinct tagging systems simultaneously: digital shelf labels for pricing, RFID tags for inventory tracking, security tags for loss prevention, and traditional price tags that still exist in transitional stores. Each serves a specific operational function that keeps America’s largest retailer running efficiently.

Walmart’s Multi-Layered Tag System

Walmart doesn’t use just one type of tag. The retailer deployed a sophisticated, multi-tiered tagging infrastructure that addresses different business needs. At the foundation sits the pricing layer, where digital shelf labels from VusionGroup replace paper stickers on shelves. These allow employees to update prices at the shelf using a mobile app, reducing the need to walk around the store to change paper tags by hand, with price changes that previously took two days now completed in minutes.

The second layer focuses on supply chain visibility through RFID technology. By 2025, most general Walmart merchandise categories require RFID tagging, with tags being Gen 2 UHF operating at 902-928 MHz and sourced from Auburn University-approved manufacturers. This requirement extends beyond Walmart’s internal operations to its supplier network, fundamentally changing how products move through the retail ecosystem.

The third layer addresses security through Electronic Article Surveillance (EAS) tags. All Walmart US stores are equipped with Sensormatic’s Acousto-Magnetic (AM) Technology with exit systems and deactivators at Point of Sale, requiring disposable anti-theft labels incorporated into product packaging during manufacturing. These tags work independently from pricing or inventory systems but integrate into the same operational workflow.

The fourth layer, traditional paper price tags, still exists in stores transitioning to digital systems. Regular prices at Walmart usually end in .97, with rollback prices marked by bright red tags and clearance items identified by yellow tags, each carrying dates indicating when price changes occurred.

Understanding how these systems interact reveals Walmart’s approach to retail technology. The e ink shelf label displays pricing information while RFID tags track the same item’s location and sales history. Security tags remain active until purchase, at which point the same POS system that deactivates EAS tags also records RFID data and triggers digital price label updates for inventory counts. This integration means one product carries multiple tags working in concert.

Walmart’s tag ecosystem cost the retailer approximately $1.027 billion in 2024 for digital shelf label deployment alone, according to VusionGroup’s contract extension announcement. The contract extension was worth about 1.027 billion euros as Walmart accelerated deployment of digital shelf label solutions across all 4,600 U.S. stores. This investment reflects the operational savings from reduced labor, improved inventory accuracy, and decreased shrinkage.

Digital Price Tags Transform Store Operations

Digital shelf labels revolutionized how Walmart manages its pricing infrastructure. The lcd price tags utilize e-paper technology similar to e-readers, requiring power only when updating displays. The digital shelf label system allows updates with Stock to Light features where associates can flash an LED light on the shelf tag using mobile devices, and Pick to Light features guide employees directly to products needed for online orders.

Implementation began in 2019 with pilot testing at Walmart’s Grapevine, Texas location. By June 2024, the retailer announced plans to expand to 2,300 stores by 2026. As of the initial program rollout in 2024, VusionGroup’s EdgeSense and VusionCloud solutions were integrated into 500 Walmart stores, with sixty-three locations having installed digital shelf labels by mid-2024. The rollout represents one of the largest retail technology deployments in U.S. history.

The technology addresses a specific operational challenge: Walmart stores stock over 120,000 products with thousands of weekly price changes for new items, rollbacks, and markdowns. Manual price changes required associates to print labels, walk aisles, remove old tags, and apply new ones—a process consuming two full days of labor per cycle. Digital systems compressed this timeline to minutes.

Consumer reception proved mixed. CivicScience data showed just 14% of U.S. adults believe replacing traditional price tags with digital ones would positively impact their shopping experience at grocery or retail stores, compared to 40% who think it would have a negative impact, with Gen Z and Millennials more optimistic while Americans 55+ lean negative. Concerns centered on dynamic pricing, though Walmart explicitly stated its systems don’t support surge pricing and the company has no plans to develop this capability.

The digital price tag machine operates through a centralized system. Store managers access VusionCloud software to schedule price changes, which transmit wirelessly to individual shelf labels within seconds. The nfc price tags in Walmart’s system don’t actually use NFC (Near Field Communication) technology—they rely on low-frequency radio transmission similar to bluetooth electronics but optimized for longer battery life and simultaneous updates across thousands of tags.

Labor savings extend beyond price changes. Associates use mobile apps to trigger LED lights on specific shelf tags, making restocking faster. When fulfilling online orders, the Pick to Light function illuminates the exact shelf location for each item, reducing search time. This efficiency means associates can spend more time assisting customers and less time on repetitive tasks, with Walmart able to move as quickly as it wants on prices and do it cheaper with higher compliance than competitors.

RFID Tags Enable Supply Chain Visibility

Radio Frequency Identification tags represent Walmart’s most extensive tagging mandate, affecting thousands of suppliers. The retail electronic shelf labels serve a different purpose than RFID, but both contribute to inventory accuracy. RFID implementation improved inventory accuracy to 95% and reduced out-of-stocks by up to 50%, with Walmart’s senior director of merchandising stating they saw dramatic results in ensuring product availability for customers.

RFID deployment began with apparel in 2020, then expanded to home goods, sporting goods, electronics, and toys by September 2022. Walmart expanded its RFID mandate to additional product categories including stationery, automotive, and lawn & garden with compliance required by February 1, 2024, with most general merchandise categories requiring RFID tagging by 2025. This phased approach allowed suppliers time to integrate tagging into manufacturing processes.

The technology works through passive tags that activate when RFID readers emit radio signals. In RAIN RFID systems, the reader and reader antenna send a radio signal to the battery-free tag chip and antenna, which then uses the transmitted signal to power on and reflect energy back to the reader, storing information either locally or in cloud-based applications. Unlike barcodes requiring line-of-sight scanning, RFID readers capture dozens of tags simultaneously as products pass through dock doors, storage areas, or sales floors.

Suppliers face specific compliance requirements. Product suppliers must ensure all items requested to be tagged have EAS Acousto-Magnetic labels meeting minimum performance standards, with detection requiring 90% detection rate at exit systems with maximum 2-meter spacing and deactivation within 10.1 cm above approved point-of-sale deactivators. Tag placement requires certification through the Auburn RFID Center, with each product variant needing individual approval due to differences in packaging and materials.

Implementation costs vary by product category and volume, but suppliers benefit from improved supply chain visibility beyond Walmart sales. RFID data tracks products from manufacturing through distribution centers to store shelves, identifying bottlenecks and optimizing logistics. The technology also enabled faster adoption of click-and-collect services, as store associates can quickly locate items for online orders using RFID readers rather than visual searches.

Walmart recently extended RFID to challenging environments. The retailer deployed new RFID-enabled labels from Avery Dennison in meat, bakery and deli departments to overcome operational challenges in cold, moist environments, with digital use-by dates at associates’ fingertips for efficient product rotation and smarter markdown decisions. This expansion demonstrates Walmart’s commitment to comprehensive RFID coverage despite technical obstacles.

Security Tags Prevent Theft

Electronic Article Surveillance tags form Walmart’s primary defense against shoplifting and organized retail crime. The shelf technology for security differs fundamentally from pricing or inventory tags, operating on different frequencies with different detection methods. Walmart’s EAS Source Tagging program ensures inventory visibility, increased sales and shrink reduction, with Electronic Article Surveillance labels being incorporated into product primary packaging during manufacturing rather than applied in stores.

Sensormatic supplies the majority of Walmart’s security tags through its Acousto-Magnetic system. The technology uses magnetic strips that oscillate at specific frequencies when exposed to electromagnetic fields at store exits. When tags pass through detection pedestals without deactivation, the system triggers audible and visual alarms. Deactivation occurs at checkout when cashiers pass items over specialized pads that neutralize the magnetic signature.

Source tagging—applying security labels during manufacturing—provides several advantages over in-store application. It allows protection of items too small, too delicate, or too difficult for store staff to tag efficiently. It also reduces labor costs and improves tag placement consistency. Products arrive at stores already protected, immediately reducing shrinkage risk.

The kroger electronic shelf labels operate differently than Walmart’s Sensormatic system, using RF (radio frequency) technology instead of AM (acousto-magnetic). Walmart selected AM technology because it offers wider exit coverage with fewer false alarms in environments with metal shelving and electromagnetic interference from other store electronics. AM labels applied by suppliers need to meet 90% detection rate at exit systems with maximum spacing of 2 meters, with all source label applied tags needing to deactivate at distances within 10.1 cm above Walmart approved point-of-sale deactivators.

Walmart maintains strict supplier compliance programs for security tagging. Products missing required tags face chargebacks, and persistent non-compliance can result in vendor termination. Periodic audits through Sensormatic ensure tags meet performance specifications. The system includes an ecommerce platform where suppliers order approved tags, track compliance, and access technical documentation.

Tag technology evolves to counter shoplifting tactics. Newer tags integrate multiple security methods, combining AM strips with RFID chips for dual functionality. This allows the same tag to trigger security alarms while enabling inventory tracking. Some high-value items carry multiple discrete tags in different locations, making complete removal difficult without damaging products.

How Store Associates Use Tag Systems

Associates interact with multiple tag systems throughout their shifts, with each technology requiring specific procedures and training. Understanding these workflows reveals how tag infrastructure translates into daily operations.

Price management became dramatically more efficient with digital shelf labels. Instead of printing paper tags and walking aisles, associates now receive mobile app notifications when prices change. They verify new prices display correctly on shelf tags, using the LED flash function to quickly locate specific items in dense shelf configurations. The system automatically logs price changes with timestamps, creating audit trails for compliance and vendor disputes.

RFID technology changed how associates handle receiving and stocking. When delivery trucks arrive, associates use handheld RFID readers to scan entire pallets in seconds, automatically comparing received items against purchase orders. The low cost small electronic shelf label display cheapest alternatives don’t match Walmart’s chosen VusionGroup technology in capability, particularly for large-scale synchronized updates across thousands of tags simultaneously.

Inventory cycle counts, previously requiring overnight shifts to physically count products, now involve walking aisles with RFID readers. The reader captures all tagged items within range, comparing results against database records to identify discrepancies. RAIN RFID solutions give retailers the ability to see real-time location and status of items in the supply chain and at stores, with readers sending tag data to software that interfaces with existing enterprise systems to immediately know whether items are in stock. This real-time visibility enables same-day restocking decisions instead of weekly or monthly cycles.

Online order fulfillment leverages both digital shelf labels and RFID. Associates receive pick lists on mobile devices, which trigger Pick to Light functions on relevant shelf tags. For RFID-tagged items, the system can pinpoint exact locations even when products are misplaced. This capability became critical as Walmart expanded grocery pickup and delivery services, where fast, accurate picking directly impacts customer satisfaction.

Security tag management requires vigilance at checkout. Cashiers scan items, triggering automatic deactivation of EAS tags. The POS system logs which tags were deactivated, creating records that help investigate alarm activations. Associates also monitor exit lanes, responding to alarms by checking receipts and verifying proper tag deactivation. High-value items often require associates to physically remove hard tags using magnetic detachers.

Training programs teach associates to troubleshoot tag system failures. Digital shelf labels occasionally lose wireless connectivity, requiring manual price verification through the Walmart app or handheld scanners. RFID tags can be damaged or shielded by metal, necessitating manual barcode scans. Security tags sometimes fail to deactivate properly, requiring associates to verify purchases and manually deactivate tags using floor-model deactivation pads.

Customer-Facing Tag Information

Shoppers encounter Walmart’s tag systems through visible labels and signage, though most underlying technology operates invisibly. Understanding what information customers can access helps decode Walmart’s pricing and inventory systems.

Digital shelf labels display more than just prices. The screens show product names, unit prices, sale dates, and occasionally promotional messaging. Some locations test QR codes on digital tags that customers can scan for detailed product information, ingredients, sourcing details, and reviews. This functionality remains limited but represents potential future applications.

Traditional paper tags still exist in non-converted stores, carrying specific information shoppers use for deal-hunting. Yellow-colored clearance tags indicate permanent discounts that continue dropping monthly until items sell, while red rollback tags signify temporary discounts lasting about two weeks, with dates under barcodes indicating when price changes occurred. Experienced shoppers track these dates to predict future markdowns.

RFID tags remain largely invisible to customers. The tags are embedded in product packaging, hangtags, or labels, typically marked with small RFID symbols. Walmart requires suppliers to display the Electronic Product Code (EPC) symbol prominently on all packaging containing RFID tags where easily visible to customers and store associates. Most shoppers never notice these symbols or understand their function.

Security tags are more obvious, particularly hard tags attached to clothing, electronics, and high-value items. These require removal at checkout, with ink tags serving as visual deterrents and alarm activators. Soft security labels embedded in packaging are less visible but serve the same function. Customers notice these tags primarily when they trigger exit alarms due to cashier deactivation failures.

The Walmart mobile app bridges online and physical pricing. Customers scan product barcodes in-store to check prices, compare with competitors, and read reviews. Digital shelf labels ensure the app displays identical prices to physical shelves, reducing checkout confusion and price disputes. This price consistency addresses a major customer complaint about traditional retail where signage, shelf tags, and register prices sometimes conflicted.

Privacy concerns around RFID technology occasionally surface. RFID tags contain product serial numbers but no personal information. Once purchased, tags have no tracking capability beyond store exits—they don’t transmit locations or identify buyers. Walmart addresses these concerns through signage explaining RFID purposes and limitations.

Technology Evolution and Future Plans

Walmart’s tag systems continue evolving as technology advances and operational needs change. Recent developments signal where the retailer is heading with next-generation tagging infrastructure.

In December 2024, Walmart signed a contract extension with VusionGroup to accelerate digital shelf label deployment across all 4,600 U.S. stores, following the initial 2024 rollout to 2,300 stores, with Walmart’s senior vice president of transformation stating DSLs have been a game-changer that simplifies daily activities for store teams. This acceleration suggests faster than originally planned adoption, driven by positive results from initial implementations.

RFID expansion continues aggressively. Walmart extended mandates to fresh food categories previously considered incompatible with RFID due to metal packaging and moisture. Meat, bakery and deli departments received new RFID-enabled labels from Avery Dennison designed to overcome operational challenges in cold, moist environments, with digital use-by dates enabling more efficient product rotation and smarter markdown decisions to reduce unsold food waste. This demonstrates Walmart’s commitment to near-universal RFID coverage regardless of technical challenges.

Integration between tag systems deepens. Future implementations may see digital shelf labels pulling data directly from RFID reads, automatically updating shelf prices based on inventory levels or expiration dates. This would enable sophisticated markdown strategies where overstocked items automatically reduce prices to clear inventory before expiration, optimizing revenue while minimizing waste.

Competitor response influences Walmart’s strategy. Target, Kroger, and Amazon all deployed similar tagging technologies, creating industry-wide pressure to match capabilities. Walmart’s investment in digital shelf labels raised stakes significantly for every retailer trying to match or beat them on prices and promotions, with Walmart able to move as quickly as it wants on prices and do it cheaper with higher compliance than competitors. This competitive dynamic accelerates adoption across the retail sector.

Consumer-facing applications expand gradually. Testing includes digital tags with nutritional information displays, allergen warnings, and sustainability scoring. Some pilot locations feature tags that change color when products near expiration, helping customers identify fresh items. Interactive tags allowing direct ordering for out-of-stock items are under consideration but face technical and operational hurdles.

Supply chain integration represents the next frontier. Walmart is exploring systems where RFID tags automatically trigger reorders when inventory drops below thresholds, communicate directly with supplier systems, and optimize distribution center routing based on real-time demand. This level of automation could reduce buyer workloads while improving product availability.

Sustainability concerns drive some development priorities. Digital shelf labels reduce paper waste significantly—with 120,000 products per store receiving multiple price changes weekly, eliminating paper tags removes millions of pounds of waste annually across Walmart’s network. RFID tags enable better inventory management, reducing food waste through more accurate demand forecasting and faster clearance of approaching-expiration products.

Frequently Asked Questions

Will Walmart use dynamic pricing with digital shelf labels?

Walmart explicitly stated it will not implement dynamic pricing. A company spokesperson told media outlets that the pricing system in Walmart stores does not support dynamic pricing and the company has no plans to develop this capability, with the pricing strategy remaining Everyday Low Prices while digital shelf labels serve as a new method to communicate pricing and a technology tool assisting associates. The digital tags enable faster price changes but not real-time surge pricing like airlines or ride-sharing services use.

Do RFID tags in products track customers after purchase?

No. RFID tags contain only product information like SKU numbers and serial codes. They don’t store or transmit personal data. The passive tags require powered RFID readers to activate—once customers leave the store, no tracking occurs. Privacy concerns about RFID tracking have been addressed through clear policies and technical limitations built into the system design.

How do I identify clearance vs rollback items with digital tags?

Digital tags use red color blocks for both Rollback and clearance pricing, making visual distinction difficult from distance, though the Walmart app remains the most reliable method to confirm pricing status by scanning barcodes, with clearance items still tending to drop about once monthly while rollbacks last 4-10 weeks. In stores with digital tags, check the Walmart mobile app or look for additional signage indicating clearance status.

Why did Walmart require suppliers to add RFID tags?

According to Walmart’s senior director of merchandising, the company has seen dramatic results in ensuring product availability for customers, leading to improved online order fulfillment and customer satisfaction, with RFID improving retail inventory accuracy to 95% and cutting out-of-stocks by up to 50%. The mandate extends benefits beyond Walmart to suppliers who gain supply chain visibility for their entire distribution network.

What happens if security tags don’t deactivate at checkout?

Store exit alarms trigger, prompting associates to verify purchases. Cashiers occasionally miss items during scanning, or deactivation pads malfunction. Associates check receipts and use manual deactivators for properly purchased items. The systems err toward caution, sometimes triggering false alarms that require brief verification rather than missing actual theft.

Conclusion

Walmart’s tag ecosystem operates as an interconnected network rather than isolated systems. Digital shelf labels update prices instantly while RFID tags track those same products through supply chains. Security tags protect inventory until purchase, when POS systems simultaneously deactivate theft protection, record RFID data, and trigger inventory updates displayed on digital shelf tags. This integration created operational efficiencies that translate into lower prices and better product availability.

The technology evolution continues accelerating. What began as paper price tags evolved into sophisticated digital infrastructure managing pricing, inventory, and security simultaneously. As competitors adopt similar systems, Walmart’s early investment and scale provide competitive advantages in speed, accuracy, and cost efficiency that shape the future of retail operations.

Key Takeaways

Walmart operates four distinct tag systems: digital shelf labels for pricing, RFID for inventory tracking, EAS tags for security, and remaining paper tags in transitional stores
Digital shelf labels reduced price change processes from two days to minutes across 120,000 products per store, with deployment expanding to all 4,600 U.S. locations
RFID mandates covering most merchandise categories by 2025 improved inventory accuracy to 95% and reduced out-of-stocks by 50%
Walmart explicitly confirmed it will not implement dynamic surge pricing despite digital tag capabilities
Tag systems integrate at checkout where POS systems simultaneously deactivate security tags, record RFID data, and update digital shelf inventory displays

References

Walmart Corporate Blog – “New Tech, Better Outcomes: Digital Shelf Labels Are a Win for Customers and Associates” (June 6, 2024) – https://corporate.walmart.com/news/2024/06/06/new-tech-better-outcomes-digital-shelf-labels-are-a-win-for-customers-and-associates
CBS News – “Walmart is shifting to digital prices across the chain’s 2,300 stores. Here’s why” (June 20, 2024) – https://www.cbsnews.com/news/walmart-digital-price-tags-stores/
CYBRA – “Walmart Mandate 2025: What to Know About the Latest Tag Mandate” (January 28, 2025) – https://cybra.com/what-you-need-to-know-about-walmarts-latest-rfid-mandate/
Sensormatic – “Walmart EAS Tagging Overview” – https://www.sensormatic.com/landing/walmart
CivicScience – “How Does Walmart’s Switch to Digital Price Tags Resonate With U.S. Shoppers?” (July 15, 2024) – https://civicscience.com/how-does-walmarts-switch-to-digital-price-tags-resonate-with-u-s-shoppers/
Impinj – “Walmart’s RFID Mandate: What You Need to Know” – https://www.impinj.com/walmarts-rfid-mandate-what-you-need-to-know
Path to Purchase Institute – “Walmart Accelerates Digital Shelf Labels Rollout” (January 15, 2025) – https://p2pi.com/walmart-accelerates-digital-shelf-labels-rollout
The Krazy Coupon Lady – “Walmart Price Tag Myths and Facts for 2025” – https://thekrazycouponlady.com/tips/store-hacks/walmart-price-tags
Tasting Table/Yahoo – “Everything You Need To Know About Walmart’s Price Tags To Shop Smarter” (March 16, 2025) – https://www.yahoo.com/lifestyle/everything-know-walmarts-price-tags-160000674.html
Retail TouchPoints – “Walmart Deploys RFID Tags in a Tough Environment: the Meat Department” (October 24, 2025) – https://www.retailtouchpoints.com/features/news-briefs/walmart-deploys-rfid-tags-in-a-tough-environment-the-meat-department
CO- by US Chamber of Commerce – “How Digital Shelf Labels Improve Retail Sales” (August 7, 2025) – https://www.uschamber.com/co/good-company/launch-pad/digital-shelf-labels-in-retail
NPR – “Walmart adopts electronic shelf labels, following other supermarkets. What it means for you” (June 19, 2024) – https://www.npr.org/2024/06/17/nx-s1-5009271/electronic-shelf-labels-prices-walmart-grocery-store
Fox Business – “Walmart going digital with shelf price tags” (June 28, 2024) – https://www.foxbusiness.com/retail/walmart-going-digital-shelf-price-tags