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'Optical RFID' is a subcategory of RFID that is based on optical readers. Applications for optical RFID tags may be found in future supply chain scenarios. The main advantage in comparison to traditional RFID tags is their low price and the usually employed offline preaggregation of data to the class level.

Unlike most other RFID chips, optical RFID operates in the electromagnetic spectrum between the frequencies of 380 THz (3.8×10¹⁴ hertz, or 708 nm) and 750 THz (7.5×10¹⁴ hertz, or 400 nm). The tag information is communicated to the reader by reflecting the read request. Parts of the incoming signal are filtered by the tag in a well-defined way as it is send back to the reader. On the reader's side, the tag data can be deducted by analysing the pattern used for filtering.

Regarding privacy, optical RFID provides much more protection against abuse than RFID based on common electromagnetic waves. This is mainly due to the fact, that line of sight is required for malicious read out. (Such an attack can easily be preventend with low cost optical RFID sight blockers).

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