A passive RFID tag is an RFID tag that does not contain a battery; the power is supplied by the reader. When radio waves from the reader are encountered by a passive RFID tag, the coiled antenna within the tag forms a magnetic field. The tag draws power from it, energizing the circuits in the tag. The tag then sends the information encoded in the tag’s memory.

The major disadvantages of passive RFID tags are: (1) The tag can be read only at very short distances, typically a few feet at most. This greatly limits the device for certain applications; (2) It may not be possible to include sensors that can use electricity for power; (3) The tag remains readable for a very long time, even after the product to which the tag is attached has been sold and is not longer being tracked.

The advantages of passive RFID tags are: (1) The tag functions without a battery; these tags have a useful life of twenty years or more; (2) The tag is typically much less expensive to manufacture; (3) The tag is much smaller (some tags are the size of a grain of rice). These tags have almost unlimited applications in consumer goods and other areas.