RSA Security Inc. on Tuesday unveiled blocking technology that would protect consumers from being tracked after buying products that contain radio-frequency identification tags.

The technology, called RSA Blocker Tag, would essentially prevent a reader in a retail store from communicating with an RFID tag. The blocking technology would only affect RFID tags within a couple of feet.

RFID technology is being used in the retail industry to track inventory. The tags contain microprocessors that store product information useful in monitoring the movement of goods through a supply chain. The technology holds the potential of cutting costs by helping retailers and suppliers reduce the amount of inventory in warehouses through better alignment between supply and demand.

While RFID tags today are primarily used on pallets and cases found in warehouses, they could someday be used on store shelves to track purchases. Consumer groups fear that store use of RFID tags could threaten the privacy of shoppers.

In a demonstration at the RSA Conference 2004 in San Francisco, RSA officials showed how a person at a pharmacy could place the drugs they buy in a bag with the blocking technology. By not deactivating the RFID tag, it could be used later by pharmacists to get useful information in refilling the prescription.

Consumers groups have advocated permanent deactivation of RFID tags at the checkout stand, but retailers have complained that the tag could be useful later if the consumer, for example, returns the product, or takes it back for repair or replacement under warranty.

To settle the issue of privacy versus commercial application, both sides will need to compromise on a solution, Gartner analyst Jeff Woods, said. "We need to get everyone together to make sure consumer privacy is protected and the needs of retailers are also considered," Woods said.

However, the blocking technology is a good first step toward finding a technological solution. "There are ways around the blocker, so it's not a perfect security system, but it's pretty good," Woods said. Technology could be developed to counteract the blocker, but it would be too expensive and cumbersome if developed today, he added.

Because RFID technology probably won't find its way into stores for another three to five years, there's time to address consumers' concerns, said Erik Michielsen, an analyst at Allied Business Intelligence. For now, retailers are learning about the technology through testing in warehouses.

"There is movement across large retailers to address privacy concerns as they begin looking at item-level RFID tracking," Michielsen said. "The question is when they'll look at item-level use. There's a lot more that needs to be learned on the supply-chain side first."

Other companies experimenting with technology to disable RFID tags include German retailer Metro AG and Tyco International Ltd., Michielsen said.

The RSA Blocker Tag, developed by RSA Laboratories, is only a research concept for now; the company doesn't have any immediate plans to sell the technology.