The publishing industry will launch a study aimed at incorporating integrated circuit tags into all books sold in Japan by 2005, industry sources said Thursday.

Use of IC tags is expected to boost combined industry earnings by a 50 billion yen or more a year, thanks improved inventory control and prevention of shoplifting.

A broad industry body, encompassing some 500 publishing houses, 40 book distribution firms and 9,000 bookstores, is scheduled to launch a research panel before the end of the year to standardize the tags, the sources said.

The tags, implanted in book covers, emit electronic waves encoded with data that receivers can pick up within a radius of 1 or 2 meters.

Publishers will be able to receive sales data at each retailer instantly, and can make decisions on reprinting books based on the information.

This will help reduce the number of returned books, currently estimated at an average of 30 percent to 40 percent of shipment volumes.

Bookstores will also be able to reduce losses from theft. By installing alarms responding to the chips, retailers will be able to foil shoplifters.

One survey shows bookstores suffer an average of 700,000 yen in theft losses annually.

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