Blockchain Applications in Retail Supply Chains: Loyalty, Returns, and Provenance

Retailers are replatforming product identity and supply-chain data to meet 2026–2028 compliance waves and to cut real losses from returns and counterfeits. This deep dive shows exactly how decision‑makers can deploy blockchain with GS1 2D barcodes, EPCIS 2.0, and verifiable credentials to move the needle on loyalty, returns, and provenance—today.

Why this matters in 2025–2028

FSMA 204 (food traceability) enforcement was aligned to July 20, 2028, after FDA announced a 30‑month extension beyond the original January 20, 2026 date; requirements aren’t reduced, just the enforcement timeline. (fda.gov)
Sunrise 2027: by end of 2027, POS worldwide should read 2D barcodes alongside UPC—GS1 reports pilots in 48 countries covering 88% of global GDP. (gs1us.org)
EU’s Ecodesign for Sustainable Products Regulation (ESPR) entered into force July 18, 2024; the 2025–2030 working plan is live. Digital Product Passports (DPPs) start rolling out by sector from 2026–2029. (commission.europa.eu)
EU Battery Regulation mandates a digital battery passport from February 18, 2027 (QR-linked, model- and item‑level data). Volvo launched one early on the EX90, estimating ~$10 per vehicle. (eur-lex.europa.eu)
EU Deforestation Regulation (EUDR) implementation was postponed to December 30, 2025 (with further political agreement in December 2025 to extend to December 30, 2026, pending formal adoption). Provenance and geolocation data will be scrutinized across coffee, cocoa, rubber and more. (environment.ec.europa.eu)

What this means: upgrading product identity and cross‑enterprise data exchange is no longer optional. Blockchain becomes the tamper‑evidence and shared truth layer—anchoring serial identities, event logs, and credentials that live primarily off‑chain in open standards.

Executive blueprint: where blockchain fits

Identity and data carrier
- Use GS1 2D (QR with GS1 Digital Link or DataMatrix) on‑pack; target dual‑marking through 2027. (gs1.org)
Event capture and sharing
- Use GS1 EPCIS 2.0 (JSON/JSON‑LD, REST) to share “what/when/where/why/how” events across trading partners; include sensor data and certifications. (gs1.org)
Verifiable product and transaction proofs
- Issue W3C Verifiable Credentials (VC 2.0) for purchase receipts, origin attestations, sustainability claims; verify with selective disclosure. (w3.org)
Integrity anchor
- Write cryptographic hashes (anchors) of EPCIS event batches and VC registries to a consortium ledger (e.g., Hyperledger Fabric with Private Data Collections) or a confidential managed ledger; only minimal metadata goes on‑chain. (hyperledger-fabric.readthedocs.io)

Below we go concrete in three revenue‑ and risk‑critical domains.

1) Loyalty that customers actually use (and compliance will support)

Tokenized, portable loyalty is moving from “NFT hype” to utility integrated with core programs.

Lufthansa Miles & More’s Uptrip (Polygon-based collectibles) moved from the Lufthansa Innovation Hub to Miles & More GmbH in 2025, with ongoing monthly collections and program‑level integration. The operator disclosed growth to ~192,000 users and >2.5 million cards issued as of mid‑2025. (linkedin.com)
Uptrip’s terms migrated under Miles & More in July 2025, with account reactivation windows and continued on‑chain transfer support—small but important details for enterprise governance. (support.uptrip.app)
Not all pilots last: Starbucks shuttered Odyssey (Polygon) in March 2024/2025, migrating stamps to Nifty Gateway and signaling a refocus on learnings rather than NFTs per se. Lesson: tie Web3 benefits to the mainline program and brand outcomes. (theblock.co)
Adidas continues token‑gated benefits via ALTS (dynamic NFTs) and app‑based authentication (Tokenproof), showing how tokenized access can live inside mainstream channels, not side communities. (nftevening.com)

Best emerging practices we implement:

Tokenize entitlements, not hype: issue verifiable credentials for tier status, warranty, or “earned benefits,” and use NFTs only when transferability or secondary‑market utility is required. VC 2.0 lets you selectively disclose without exposing PII. (w3.org)
Link loyalty to product identity: scanning a GS1 Digital Link code can both resolve provenance and update loyalty benefits (e.g., bonus for scanning at return, recycle, or resale), with dynamic content controlled by the brand’s resolver. (gs1.org)
Keep the chain minimal: store balances and business logic off‑chain; anchor only state transitions (hashes) to a low‑cost chain or confidential ledger to avoid custodial and regulatory overhead. (techcommunity.microsoft.com)

2) Returns that reduce fraud and cost

U.S. retail returns are a persistent cost center and a ripe target for blockchain‑assisted fixes.

Scale of the problem: 2024 returns were projected at $890B; 2025 near $850B. Fraudulent/abusive returns were ~15% of returns in 2024 ($103B), with online return rates (~19–25%) dramatically higher than in‑store. (nrf.com)

What works now:

Serial‑level authenticity at return
- Add unique, on‑pack serials (GS1 Application Identifiers) in a 2D code or RFID, binding to the item’s on‑chain fingerprint created at fulfillment. POS/returns kiosks validate that the serial was sold (and not previously returned). This reduces “box‑of‑rocks,” counterfeit swaps, and wardrobing. (gs1.org)
Receiptless returns with verifiable receipts
- Issue a W3C verifiable credential at purchase (or attach to the customer account). At return, the wallet presents a privacy‑preserving proof: “This serial was purchased by me on date X,” without exposing other transactions. (w3.org)
Returns decisioning fused with EPCIS
- Query EPCIS 2.0 to check product condition signals (e.g., cold‑chain temp breach events) before auto‑refund, and route high‑risk SKUs to manual inspection. (gs1.org)
Counterfeit interception using serialization at marketplaces
- Amazon’s Transparency demonstrates the anti‑counterfeit and returns‑integrity impact at scale: 2.5B+ units verified and 88k brands enrolled in 2024–2025. Integrate your own serials with marketplace verification. (aboutamazon.com)

Quick‑start architecture for returns

At fulfillment, compute item hash = H(serial + GTIN + lot + orderID); anchor to ledger; store full data off‑chain.
Issue a VC receipt to the buyer’s account.
At return, scan 2D code; POS asks wallet for a proof; ledger returns “valid & not previously returned.”
For high‑risk categories, require RFID read (if present), and cross‑check EPCIS history for discrepancies.

With Sunrise 2027, enabling 2D scanning at POS is a prerequisite—and scanners must be configured to parse GS1 Digital Link and handle inverse reflectance for performance. (gs1.org)

3) Provenance you can defend to regulators and customers

Food, fashion, electronics, and batteries are converging on traceable, queryable product histories.

GS1 EPCIS 2.0 gives you a standards‑based event model (JSON/LD, REST) to record aggregation, transformation, and sensor events—and to attach certifications and sustainability claims. (gs1.org)
DPP momentum: ESPR entered into force July 18, 2024; the Working Plan 2025–2030 is live; pilots (CIRPASS → CIRPASS‑2) are demonstrating item‑level passports in textiles, electronics, tyres, and construction. Plan first product categories phased 2026–2029. (commission.europa.eu)
Luxury’s Aura consortium has registered 70M+ products, aligning with DPP trajectory while tackling authenticity and resale transfer—evidence that shared product passports can work across fierce competitors. (voguebusiness.com)
Battery passports: mandatory in the EU for EV, LMT and >2kWh industrial batteries from Feb 18, 2027. Volvo’s EX90 launches ahead of mandate, with QR‑accessed views for regulators and owners. (eur-lex.europa.eu)
Food: while FSMA 204 enforcement is extended, aligning KDE/CTE data with EPCIS and anchoring batch/lot attestations now will de‑risk and accelerate compliance later. (fda.gov)
EUDR (deforestation‑free products) shifted timelines, but political agreement in December 2025 supports postponement to December 30, 2026. Expect strict geolocation traceability at plot level for cocoa/coffee/rubber supply chains. (consilium.europa.eu)

Don’t forget RFID: Walmart’s broad RFID mandates across general merchandise underscore the direction of travel—serialized items and automated reads. RFID and 2D coexist; both feed EPCIS and DPPs. (impinj.com)

Implementation patterns we deploy (and why)

Standards‑first data model

Identify items with GS1 GTIN + serial (AI 21/91), expose via GS1 Digital Link URIs, and capture events in EPCIS 2.0. This keeps you interoperable across suppliers, 3PLs, and marketplaces. (gs1.org)

Credentials at the edge

Use W3C VC 2.0 to issue attestations (origin, organic certification, warranty, proof‑of‑purchase). These are portable across wallets and survive system migrations. (w3.org)

Minimal‑on‑chain

Store hashes of event batches, credential status lists, and policy versions on a consortium chain (e.g., Hyperledger Fabric with Private Data Collections) or a confidential ledger (e.g., Azure Confidential Ledger now ~$3/day per instance). This gives tamper‑evidence and auditability without leaking business data. (hyperledger-fabric.readthedocs.io)

Resolver as a product

Operate a GS1‑conformant Digital Link resolver to route scans contextually (consumer, regulator, partner), and to rotate links without reprinting packaging. (gs1.org)

Privacy and performance

Keep PII off‑chain; use private data collections and access‑controlled APIs. For sensitive queries, Fabric PDCs and emerging techniques (e.g., private reads) protect what’s being queried. (hyperledger-fabric.readthedocs.io)

Concrete use cases to launch in 90–180 days

Provenance + recall agility (food):
- Map KDE/CTE to EPCIS 2.0; print GS1 QR at case/pallet; batch‑anchor EPCIS events weekly; pilot consumer scan pages.
- KPI: time‑to‑isolate lot during mock recall; % suppliers sending EPCIS; scan engagement. (gs1us.org)
Return‑ready serialization (apparel/electronics):
- Add GS1 Digital Link code with serial; emit VC receipts post‑purchase; enable receiptless returns with credential proof; flag prior return attempts at POS.
- KPI: fraudulent returns rate; average refund decision time; % receiptless returns completed successfully. (w3.org)
DPP pilot (textiles or small electronics):
- Implement an item‑level DPP schema aligned with CIRPASS‑2 guidance; include materials, care, repair, and resale events; expose via QR + API.
- KPI: completeness of required attributes; resale conversion; repair uptake. (cirpassproject.eu)
Battery passport readiness (CE with battery packs):
- Build the digital passport dataset and QR access pattern; test regulator vs. consumer views; plan for Feb 2027 cutover.
- KPI: data coverage (model‑ vs item‑level), proof‑generation time, regulator self‑serve access. (eur-lex.europa.eu)

What good looks like (tech stack reference)

Data capture: 2D printers and scanners certified for GS1 2D and inverse reflectance; RFID where mandated; mobile SDK reading GS1 Digital Link. (gs1.org)
Data layer: EPCIS 2.0 event broker + data lake; VCs (Data Integrity or JOSE/COSE signatures) for attestations; VC status lists for revocation. (w3.org)
Ledger:
- Permissioned: Hyperledger Fabric (Private Data Collections) for chain‑of‑custody and returns state;
- Managed/TEE: Azure Confidential Ledger for low‑cost, tamper‑evident anchoring and audit evidence. (hyperledger-fabric.readthedocs.io)
Resolver + APIs: GS1 Digital Link resolver, consumer content CMS, regulator/API endpoints with role‑based disclosure. (gs1.org)

Risk controls and governance to bake in

Data minimization and confidentiality by default; never store PII or trade secrets on a public chain. Use VCs for selective disclosure. (w3.org)
Schema governance: version your EPCIS event vocabularies and DPP attribute sets; keep machine‑readable policies and audit trails anchored. (gs1.org)
Business continuity: keep off‑chain storage authoritative; ledgers are integrity layers. Regularly verify anchors (hash replay) and maintain export paths. (techcommunity.microsoft.com)

Measurable outcomes to target in year one

Returns
- 15–30% reduction in fraudulent returns in serialized SKUs; <30‑second receiptless return decisions at POS. Benchmarked against Appriss/NRF fraud baselines. (retaildive.com)
Provenance and compliance
- 90%+ supplier EPCIS coverage for priority categories; sub‑minute lot‑level isolation in mock recalls. (gs1.org)
Loyalty and engagement
- 10–20% uplift in scan‑to‑engage from GS1 QR (resolver‑driven content); credential‑based benefits redemption tracked without exposing PII. (gs1.org)

What 7Block Labs recommends next

Baseline standards readiness

Assess GS1 2D readiness (dual‑marking, POS parsing modes) and supplier EPCIS maturity. Plan resolver operations. (gs1.org)

Pick one high‑impact pilot per domain

Food provenance (FSMA 204 readiness), return‑ready serialization (fraud reduction), and one DPP category. Time‑box to 12–16 weeks each, with shared plumbing (EPCIS, VCs, resolver, ledger). (fda.gov)

Production‑grade hardening

Extend supplier onboarding; automate credential issuance; set up confidential anchoring; define audit playbooks per regulation (FSMA, ESPR/DPP, EUDR, battery). (commission.europa.eu)

Proof that this is real—and working

Aura Blockchain Consortium: >70M luxury products registered; cross‑brand collaboration ahead of DPP. (voguebusiness.com)
Volvo EX90 battery passport in market ahead of EU mandate; owners and regulators get tailored QR views. (reuters.com)
Amazon Transparency: 2.5B+ units authenticity‑verified, 88k brands enrolled—serialization at scale. (aboutamazon.com)
GS1 Sunrise 2027: 2D pilots in 48 countries, representing 88% of global GDP; POS upgrade is underway. (gs1.org)

The bottom line

If you can’t uniquely identify an item, capture its lifecycle events, and prove claims without oversharing data, you’ll struggle to meet 2026–2028 regulations—or to stop very real leakage in returns and counterfeits. The winning pattern is clear: GS1 2D + EPCIS 2.0 + VCs off‑chain, with lightweight, confidential anchoring on a ledger. Start with one domain (returns or provenance), reuse the plumbing for loyalty, and measure ROI within two quarters.

Sources and further reading

FDA FSMA 204 compliance date updates and resources. (fda.gov)
GS1 Sunrise 2027, 2D at POS, and GS1 Digital Link. (gs1us.org)
ESPR/DPP timelines and CIRPASS‑2 pilots. (commission.europa.eu)
EU Battery Regulation—battery passport 2027; Volvo EX90 passport. (eur-lex.europa.eu)
EUDR timeline adjustments (2024–2026). (environment.ec.europa.eu)
EPCIS 2.0 capabilities for event sharing; GS1 FSMA resources. (gs1.org)
W3C Verifiable Credentials 2.0 Recommendation. (w3.org)
Returns and fraud statistics (NRF, Appriss/Deloitte, Retail Dive). (nrf.com)
Amazon Transparency and brand protection reports. (aboutamazon.com)
Lufthansa Uptrip program transition and activity. (linkedin.com)

Need a 90‑day plan mapped to your categories, POS stack, and supplier base? 7Block Labs can blueprint the GS1/EPCIS/VC/ledger stack, stand up a resolver, and prove ROI in one pilot per domain.