Ferragamo Puts Microchips in Shoes in Bid to Fight Fraudsters

  • RFID tags in soles of pricey shoes can prove authenticity
  • Fashion brand removed about 25,000 counterfeit goods in 2015

Salvatore Ferragamo SpA is embedding microchips in its bags and shoes, as the luxury industry steps up efforts to combat fraudsters.

Radio frequency identification (RFID) tags, which work like high-tech bar codes to identify and track everything from food to weapons, have been inserted in the left sole of most of Ferragamo’s women’s shoes since 2014, the company said in its first disclosure about its tagging program. It has since added men’s shoes, women’s leather goods and luggage.

The tags will allow Ferragamo to “track the shoe with certainty, giving the group better control in the fight against fakes,” said the Italian luxury-goods maker, whose products include 595-euro ($662) sandals.

RFID tags are more commonly used by big retailers to manage stock, with Inditex SA saying Wednesday that by the end of this year, its Zara chain will have the technology in more than 2,000 stores. That they’re now being used by the likes of Ferragamo shows how luxury brands are taking counterfeits and grey-market products more seriously as they grapple with slowing demand, particularly in China.

Ferragamo, which is struggling to grow sales in Asia, worked with Chinese authorities to destroy or confiscate about 25,000 counterfeit goods last year, and blocked 91,000 online advertisements for fake products. The total value of bogus Ferragamo items that were confiscated or destroyed in China last year, including goods seized separately by customs officials, exceeded $17 million and more than half were belts, the company said.