How Retail Barcodes Work

A barcode is a symbol that visually encodes numbers using differently sized black bars, allowing a scanner to read and retrieve the numbers which the bars represent. Barcodes are primarily used in retail environments, where each barcode has a different product assigned to although there are other applications.

This system has many benefits which is why barcodes are ubiquitous in retail stores around the world. These benefits include:

  • Quickly pulling up accurate pricing information at the checkout
  • Reducing human error by using an electronic scanner
  • Keeping track of stock changes in real time
  • Easy reordering when stock gets low

supermarket checkout

For these reasons and more, if you want to sell your product at a retail store they will likely insist that your item has a barcode. Of course, this whole system only functions because barcode numbers are kept unique. If anyone could make their own barcode, the number would no longer be a unique identifier as several different products could have the same barcode, causing chaos. The inventors of the barcode were aware of this, so when barcodes were first conceived in the 1970s in the USA an organisation called the Uniform Code Council (UCC) was created to regulate codes and ensure they remained unique. A few years later another organisation, the European Article Numbering Association (EAN), was created to manage barcode use outside of the US. To this day North America uses 12 digit UPC barcodes rather than 13 digit EAN codes like the rest of the world.

It is important to note that your barcode does not contain any details about your product, it is simply a unique number and image representing that number. Product information is input by the retailer when they add your item into their computer system. This is why if you take a football from a sporting goods store and scan it at the checkout of a makeup shop, nothing will come up (unless the makeup shop also sells that particular football).

Where do Barcodes Come From?

Barcodes are regulated and distributed by the global organisation known as GS1, which was formed when the UCC combined with the EAN. This is a membership organisation which licenses out barcodes, which means to get barcodes directly from GS1 you would have to file the paperwork to join (along with a joining fee, location dependent), wait to be accepted, and then pay expensive yearly license fees to maintain use of your barcodes. Retail stores require a GS1 barcode on products they stock, however luckily GS1 is not the only provider of such codes- instead you can buy your codes from a genuine barcode reseller such as ourselves, paying a smaller one time fee and owning the codes for life.

GS1 Australia

Where do Our Barcodes Come From?

We have already learned that GS1 was formed when the UCC and EAN merged in the late 1990s. Before this merger took place, the UCC sold barcodes for a one off cost, while EAN licensed them out like GS1 does today. After the merger, the newly formed GS1-US decided to charge an annual license fee, including to members who had originally purchased barcodes for a one off cost. Unsurprisingly, these members were unhappy about suddenly being charged yearly for codes that they had bought and owned, so a class action lawsuit was filed which resulted in a victory for the barcode owners. One consequence of this lawsuit was that GS1 was forced to pay a multimillion dollar settlement, but more importantly it established that the barcodes sold by the UCC prior to adopting the licence business model were owned by the businesses that purchased them, and not controlled by GS1 anymore despite being totally legitimate GS1 codes. All codes sold by barcode resellers, including us, originate from these privately owned barcodes.