Wal-Mart customers who picked up lipstick off the shelf at a Broken Arrow, Okla., store were part of a little-mentioned experiment earlier this year that tracked consumer habits using Radio Frequency Identification technology, or RFID.

Procter & Gamble Co. teamed with the retail giant in the test over a four month-period which allowed researchers to view the Wal-Mart shelves from company headquarters some 750 miles away in Cincinnati, according to the Chicago Sun-Times.

Also, the Max Factor Lipfinity lipstick had RFID tags hidden inside that allowed the inventory to be tracked leaving the shelves.

The Chicago paper said it was informed of the study by a disgruntled P&G employee.

Wal-Mart first denied the test, but then admitted it had allowed customers to be watched.

A P&G spokeswoman said a sign at the Lipfinity display “alerted customers that closed-circuit televisions and electronic merchandise security systems are in place in the store,” the Sun-Times reported.

She insisted the system could only track lipstick leaving the shelves. Once the product was taken away, it would be out of range.

A privacy rights group, however, has called for mandatory labeling of the products with RFID chips.

“On the surface, the Broken Arrow trial may seem harmless,” Katherine Albrecht, founder and director of Consumers Against Supermarket Privacy Invasion and Numbering, or CASPIAN, told the Sun-Times. “But the truth is that the businesses involved pushed forward with this technology in secret, knowing full well that consumers are overwhelmingly opposed to it.”

As WorldNetDaily reported, Gillette, the nation’s largest shaving-products manufacturer, planned to conduct a trial of RFID last summer at a Brockton, Mass., Wal-Mart store.

The plan called for Gillette to embed a tiny microchip in each of its products so store managers could track Gillette store stock and alert them if products were running low. Eventually, say critics, the technology could be used to literally track products from store shelves to homes.

However, according to the Washington Times, Wal-Mart abandoned its “smart shelf” experiment for the time being. Instead, the paper said, the retailer would incorporate RFID technology at each of its 103 distribution centers around the country to monitor inventory.

The decision, said the Times, came after Albrecht and CASPIAN called for a letter-writing campaign against Wal-Mart. But retailer spokesman Tom Williams denied that was the motivation for Wal-Mart changing its “smart shelf” plans.

“We didn’t cancel anything. We just didn’t follow through with this particular idea,” he told the paper.

But the Times report said other large retailers, such as Target and Home Depot, were testing the RFID technology to monitor inventory in their storerooms and distribution centers.

Wal-Mart and the U.S. Department of Defense have been the biggest boosters of the technology.

Related stories:

Shopping to go high-tech?

Dark side of supermarket ‘savings cards’

Supermarket cards threat to privacy?

Implantable chip company in financial dire straits

GPS implant makes debut

‘Digital Angel’ unveiled

Note: Read our discussion guidelines before commenting.