How do you prevent baggage loss? New airline bag tags can be programmed with a mobile phone to make the sticky strips of paper on your bag a thing of the past. The idea could save airlines around the globe a ton of money since they print billions of paper tags they lug around your luggage.

The whole system is not fool proof either. About 1% of luggage was mishandled last year worldwide, costing an estimated $2.6 billion, according to the International Air Transport Association.

“It’s painful [for airlines] in so many ways,” says Richard Wartham, president and chief executive officer of Vanguard ID Systems, a suburban Philadelphia company that makes a radio-frequency identification bag tag. “It’s 1970 technology, you know? But because it’s just such a huge installed base, it’s hard for them to change on a dime.”

At a passenger conference this week in Dublin, a global standard for RFID technologies that can be used to help airlines and airports cut costs and increase efficiency. “The aim is not to eliminate paper, but to eliminate hassle,” Andrew Price, an IATA project manager, wrote in an email. “With the tag, you can queue less.”

Vanguard's new plastic device is embedded with RFID technology and near-field communications and an electronic paper display from E Ink allowing a traveler to use a phone app to code the tag with a destination and have it display on the tag. The RFID tag transmits the bag's location, and the idea is to have a guy change his tag in the cab on the way to the airport. The display can be compatible with current handheld baggage scanners that airports have deployed widely.

Will this help save airlines billions? And more importantly, will this prevent baggage lost?