Radio frequency identification (RFID) has become an increasingly widespread technology. However, there has been limited research on it with regard to customer-related issues. This paper proposes a theoretical model to investigate customer perceptions of privacy risk and trust for the retail stores with all RFID tagged items. The results suggest that customers with high sensitivity to privacy risk have a lower degree of trust in RFID applications. However, benefits to customers are incentives for retailers to both mitigate customer worries about their privacy being invaded and increase their trust in retailers. One way to do this is by implementing strong data security systems. This research thus presents a set of guidelines to help retailers successfully apply this technology in their stores.