Barcodes aren't just everywhere—they also serve a purpose. The small design of black lines and numbers on almost everything we buy helps retail stores run smoothly.
Developed to store important product data in a way that machines could read, barcodes became commercially popular in the 1970s, particularly in supermarkets.
Over time, regulatory committees have standardized barcodes, leading to many of the variations you see today. However, this variety may also cause confusion about their specific uses.
Whether you're a retail store owner or simply curious, this guide dives into the mechanics of how barcodes work and the value they offer.
What is a barcode?
A barcode is a unique visual pattern of lines or squares that encodes information about a product in a way computers can understand. It typically contains black-and-white stripes or a matrix of dots representing numbers and letters.
Think of barcodes like a license plate. There's nothing stored in the license plate. It's simply a number that, when looked up or keyed into a system, pulls up more data about the driver and the car.
Barcodes vs. QR codes
Unlike barcodes, which can only be scanned in one direction and hold limited information, QR codes can hold much more data—including URLs, contact information, and texts. They can be scanned from any angle, making them a great option for digital and interactive use.
How do barcodes work?
A barcode contains information in a pattern of lines or dots that a barcode scanner reads. Each number from 0 to 9 is assigned a different set of black and white bars. If, for example, an item is assigned a 10-digit number, a barcode will represent that number with 10 different black-and-white bar combinations.
The barcode scanner shines a light on the barcode and reads the reflected light to decode the pattern. The pattern is then translated into numbers and letters, which represent specific details about the product.
The decoded information is then sent to a computer for pricing, inventory tracking, and other processes needed to help retail stores run smoothly.
Types of barcodes
Barcodes are broadly categorized into two main types based on their dimensions and the kind of data they encode.
In linear or one-dimensional barcodes, the pattern is formed by the varying widths of the bars and the spaces between them. Barcode scanners read this pattern and compare it to product records in a database or a POS system. Several global 1D barcode standards exist, each encoding information uniquely suited to its specific use case.
There are also two-dimensional (2D) barcodes, or matrix codes, that use geometric patterns, such as QR codes, which mobile devices and built-in cameras can read.
UPC barcodes
Universal Product Code (UPC) is a general term for the barcode symbol used to track items in stores. You might see these called EAN, which is the European standard for barcoding.
UPCs come in different variations, each designed for specific uses. One perk of using UPC codes is the ability to track products across different stores and online channels.
The standard UPC system encodes 12 numeric characters, but there are several variations including:
- UPC-E: A version with six digits used for smaller areas on packages and papers.
- UPC-2: This is a two-digit addition to a UPC for journals and magazines to indicate the edition or issue.
- UPC-5: A five-digit addition to a UPC commonly used among book publishers to indicate suggested retail prices.
UPC codes offer immediate access to product information and pricing. Plus, UPCs support more robust inventory management systems and product tracking, from production all the way to the point-of-sale device.
Code 39
The most popular non-UPC barcode, Code 39 is defined by an alphanumeric set, meaning it can represent both numbers (0-9) and letters (A-Z), along with a limited set of special characters (-, ., space, $, /, +, %, and the asterisk (*) as the start/stop character).
It’s decoded by laser, charge-coupled device scanners (CCD), as well as image-based barcode scanners and is widely used in packaging and shipping.
Code 128 barcodes
Code 128 is a high-density, alphanumeric barcode that can encode all 128 characters of the ASCII table (numbers, letters, and control codes). It's versatile and used across industries for packaging, shipping, and managing inventory.
This type of barcode offers three character sets (A, B, C), that allow for efficient encoding of all standard ASCII characters. Its versatility makes it suitable for more than just retail applications.
Custom barcodes
The perks of using a custom barcode include affordability and more flexibility with product numbering. You create your own barcode format and point it to internal data you manage. This allows you to get creative with the way you break down the digits into subcategories like product types and other classifiers.
How are barcodes generated?
Barcodes are generated using software. Stores decide what information (quantity, color, type) they want to collect with the barcode and choose the barcode format accordingly.
The software will automatically generate a machine-readable barcode. With the right software, a barcode reader, and a label maker, you’re able to create custom barcodes that let you determine your own symbology and product numbers.
1. Create product codes
Using a UPC barcode binds you to certain standards, and you must pay to procure your barcodes.
GS1 offers different payment tiers based on the number of product barcodes you need. Once you determine how many barcodes you need, you can buy a certain amount of barcodes and receive a company prefix. For example, if you have an eight-digit company prefix, then you have only three digits for product numbers, which works out to be over 1,000 possible product numbers. This costs $2,500.
GS1 will then assign a manufacturer ID number, which is the first number of the 12-digit UPC. The remaining numbers are uniquely assigned product numbers. GS1 assigns these numbers to your products once you upload criteria for certain fields, like name, quantity, description, etc.
You can then assign unique product codes for each item or service you offer. These codes will serve as the foundation for your barcodes, ensuring each product is easily identifiable.
2. Use a free barcode generator
A free barcode generator makes it easy to create and print custom barcodes for your business. To use the free generator:
- Type in the data you want to encode into the barcode
- Enter your email address
- Download the custom barcode in a PNG file format to print
3. Test your barcode
After generating your barcode, test it with a scanner to ensure it accurately reflects the assigned product information. This step verifies that your barcode works seamlessly within your sales and inventory system.
4. Repeat for all products
Stores need individual barcodes for each product, not each individual item. Otherwise, you may find yourself in a confusing mess when it comes to product distribution, inventory management, and sales tracking.
For example, if you have a batch of 100 dog collars, they would all receive the same barcode. You do not need 100 unique barcodes for each collar.
Repeat the barcode generation and testing process to ensure that every item is properly coded and identifiable. This systematic approach guarantees that your entire inventory is trackable, simplifying the sales process.
5. Print your barcode labels
If you’re using UPC barcodes, you can add these individually to your product listings in a POS. Once retailers set up and purchase barcodes from GS1, they can access and manage them directly through the GS1 Data Hub. From there, you can use any number of label creation methods to download and print your barcodes.
For retailers looking to create and print custom barcode labels for their products, a POS system that has integrated barcode software is the way to go. Shopify POS has a Retail Barcode Labels app that allows stores to design and print barcodes onto labels with an attached POS barcode printer or any inkjet or laser printer on labels.
3 ways to use barcodes
Ring up items on your POS
Barcodes on products are perfect for speeding up the checkout, return, or exchange process—eliminating manual data entries and human error in the process. Retailers can also put barcodes on receipts.
Many POS systems (including Shopify POS) can create a barcode for a transaction that stores information related to the sale. Receipt barcodes can include any of the following data:
- Date and time of purchase
- Store number, if multiple locations
- Register number
- Associate or staff name
- Item price
- Coupons or discounts used
- Method of payment
Scan and calculate inventory
For backroom or stockroom purposes, scanning barcodes helps store owners keep track of their stock location and quantities. Shopify POS, for example, has integrated inventory management capabilities that retailers use to unpack, track, and store a new stock shipment.
Shelving locations can also have barcodes that can be scanned and stored, linking the location to a product for stockroom visibility and organization.
Quickly find product data
Using a barcode scanner, retailers quickly look up any of their products and access their data.
Depending on the type of barcode, custom or UPC, the software receiving the binary code scheme will pull up whatever data is associated with the barcode. The data you decide to store in your POS or online database about a product is up to you.
That raises the question: “Can I scan any barcode and access the information about its product?” While UPCs all look the same, the data stored in the barcode is private and connected to a store’s POS or inventory management software. You own the rights to your product information—it can only be accessed by you or with whomever you share the information.
What’s the difference between SKUs and barcodes?
SKUs and barcode numbers both manage inventory but serve different purposes. A SKU is a unique code assigned by a retailer for internal stock management, customizable to the business's needs. Unlike SKUs, barcodes are universal identifiers used across retailers for scanning and data tracking, facilitating efficient inventory management and cost reduction.
When to use a SKU
Use SKUs for internal tracking of stock levels, like categorizing jewelry by size, material, and type using an easy-to-understand code. For example, medium gold hoop earrings could be coded as “MED-GLD-HOOP-01.”
You can convert SKUs into barcodes for scanning purposes, but remember, SKUs are for internal use, unlike universal barcodes designed for transactions and wider inventory management.
When to use a barcode
Use barcodes, like UPCs, as universal product identifiers across different retailers and sales channels. This ensures that a product has the same barcode everywhere.
For example, the same refrigerator model will have the same UPC at different stores, unlike store-specific SKUs. This universal coding facilitates product sales both in physical stores and online, which is why UPCs are crucial for managing inventory accurately across all retail platforms.
Generate barcodes for your store
Barcodes seem confusing until you understand them, and then you realize just how simple and straightforward they are meant to be. Barcodes are simply a visual representation or picture of a product identifier. Machines can read them and point to data about your products that help you run your businesses better.
Systems like Shopify POS can help integrate your barcode management with your products seamlessly.
Manage inventory from one back office
Shopify POS comes with tools to help you manage warehouse and store inventory in one place. Forecast demand, set low stock alerts, create purchase orders, know which items are selling or sitting on shelves, count inventory, and more.
How are barcodes generated FAQ
What does a barcode tell you?
A barcode encodes information like a product's identification, price, and manufacturer. It allows for quick scanning at checkouts and efficient inventory management.
Can 2 products have the same barcode?
Every product requires a unique barcode to ensure accurate tracking and inventory management. Duplicate barcodes would lead to confusion and errors in the system. However, keep in mind that stores need individual barcodes for each product, not each individual item.
How do companies generate barcodes?
Companies obtain unique identification numbers from organizations like GS1 and then use barcode generation software to create the barcode. This process ensures that each product has a globally unique barcode.
How is a barcode made up?
1D barcodes consist of black bars and white spaces representing numbers and letters. Scanners read this visual pattern to decode the information contained within.
Are barcodes ever reused?
Reusing barcodes is a no-no unless you're doing a second run or batch of a previously barcoded product. In every other scenario, a new barcode number is required.
.
This article originally appeared on Shopify Retail Blog and is available here for further discovery.
