It's always a delight when engineers come up with a simple, obvious-in-retrospect solution to a complex and apparently intractable technology problem.

The problem: RFID tags present privacy risks when misused, allowing consumers to be tracked by thieves and unscrupulous businessmen and government officials. The challenge: Find some way to use RFID when it's appropriate, but disable it when it's no longer needed or wanted. Sure, you can zap the little buggers with some kind of radiation, expose them to hot water, or even smash them with a hammer--RFID tags are fragile little beasties--but how is a consumer to know whether that works?

IBM's solution is brilliantly simple and familiar to anybody who's ever put a stamp on a letter: perforation.

IBM last week introduced the Clipped Tag, an RFID tag with a perforation that allows consumers to tear off the antenna when they bring their products home. When the tag is intact, it has the same range as any RFID tag, about 30 feet. After the tag has been clipped, the range is about an inch--still usable if a customer wants a return or exchange and store staff needs to read the tag, but useless to passing thieves and corporate and government busybodies.

The technology comes as retailers start tagging individual consumer items. Levi Strauss is testing RFID on men's jeans sold in one U.S. store and on pants in two stores in Mexico. Levi Strauss hopes the technology will help companies better control inventory for faster restocking and fewer empty shelves.

RFID entails real privacy risks. Thieves using pirated RFID scanners could stand on a street corner and scan people as they go by, looking for targets wearing expensive consumer goods. RFID-enabled passports could help terrorists scan the streets of London or Riyadh, looking for American passersby. And we're all leery of giving unscrupulous businessmen and power-grabbing government officials the ability to invisibly inventory our clothes and pockets.

But RFID also presents the possibility to be a powerful tool for retailers, enabling them to exert more control over their supply chains, keep shelves stocked with a variety of goods, and hold down prices. Those things benefit everyone.

Privacy needs and business concerns seem to be in conflict here, but the conflict can be resolved. Implement RFID, but do it in a way that protects consumer privacy. IBM is off to a good start with the Clipped Tag.

By the way, an earlier article on the Levi Strauss proposal quotes privacy advocates condemning Levi Strauss. I'm not sure what the heck they're worried about. I mean, how can you be concerned about privacy protection for information that's already written on people's butts?

What do you think? Can privacy and RFID be reconciled?