Unlike barcodes, with RFID the reader or scanner does not need to see the actual tag to read it. The scanner sends out electromagnetic waves and the tag receives from a small antenna. The, the tag sends back its waves. The scanner receives and converts these waves to digital data. The specifics of the process depend on whether the tag is passive or active. An active tag uses an internal battery source, whereas a passive tag relies on energy transferred from the reader.
Since the tags store data digitally, they open up a whole new world of opportunity. Companies can to scan more items, speed up the shipping process, and gain more detailed processing info.