What is Geofencing?

October 22, 2021


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Key Takeaways

Generating a virtual perimeter or “geofencing” helps businesses monitor activity within a defined area. Fleet managers can track activity around warehouses, distribution centers, and delivery locations. Geofencing also allows companies to track deliveries in real time and helps plan efficient routes. Learn more about how geofencing works and how it’s commonly used.

What is geofencing?

A geofence is a virtual perimeter for a real-world geographic area. A geofence could be generated dynamically or can have a predefined set of boundaries. The use of a geofence is called geofencing. 

Geofencing is a location-based service where software or apps use global positioning systems (GPS), RFID, Wi-Fi, or cellular data. It triggers an alert when a location-aware device enters or exits a virtual boundary. For example, if a mobile device or RFID tag enters or exits a geofenced area, it can prompt: 

  • Push notifications

  • SMS messages

  • Send ads via social media

  • Allow tracking for vehicle fleets

  • Trigger actions in other apps

  • Disable specific technologies

Geofencing is widely used as a security tool to monitor activity in secure places, allowing users to see who is accessing specific areas. Businesses also use location data to monitor employees in the field and time tracking. Geofencing is a handy tool for marketers who use it to deliver location-based promotions; this is called geo-targeting.

How does geofencing work?

Geofencing software platforms use different technologies to build their virtual fences. The most commonly used technologies are GPS, RFID, Wi-Fi, cellular data signals. Some fences are built on IP address ranges. 

Setting up a geofence can be as easy as drawing a circle around a location on Google Maps with the geofencing software. Geofences can be drawn in any shape or size to accommodate larger areas or specific buildings. When an authorized or unauthorized device, RFID tag, or mobile app enters or exits this specific location, it triggers a response. 

Geofencing software integrates with other systems to create customizable triggers. These triggers are simple “if this, then that” style commands where an app is programmed to take action based on another action. For instance, “When a vehicle enters this area, send the warehouse manager a text message saying: Driver is 10 minutes away from the warehouse.”

Difference between geofences and beacons

Geofences and beacons can both be used to detect location and proximity, but they use different technologies. A beacon is a BLE or Bluetooth Low Energy hardware device. They broadcast a signal that Bluetooth-enabled devices can pick up when users opt into specific mobile apps. Beacons differ from geofencing because they:

  • Are a physical device. Beacons are hardware devices used to track location; geofencing requires no hardware.

  • Don’t rely on GPS or Wi-Fi. Beacons don’t rely on these technologies in any way. However, they require Bluetooth to be turned on.

  • Have a shorter range. Beacon signals broadcast as far as a Bluetooth signal travels — approximately 30 feet. Geofences can be drawn virtually anywhere.

Generally, geofencing and beacons are complementary technologies that come down to precision. Geofences are better at covering large areas, while beacons cover smaller, close-proximity locations with accuracy. Beacons can be placed indoors, creating ultra-targeted micro-locations.

Common use cases for geofencing

Fleet telematics

Geofencing has become a valuable tool for fleet telematics and overall supply chain management. Fleet managers and dispatchers can track activity around warehouses, distribution centers, and delivery locations. By setting up geofenced areas, fleet managers can track deliveries in real time, decrease detention time, plan routes efficiently, prevent cargo theft, and improve customer service.

Public sector

Geofencing is particularly important for public fleets such as governments and schools. Public fleets and public works vehicles are needed at peak community times, like snowstorms, community events that leave streets dirty, or overflowing trash. In addition to knowing precisely where public vehicles are located, and when they are removed —geofences also help public fleets provide more sustainable snow removal services. Salt and brine solutions can greatly hurt the environment and therefore many government agencies that oversee snow removal are leveraging geofence technology to limit material spreading such as salt and brine so that they don’t impact more environmentally sensitive areas that would be impacted by the materials (land and animals etc.). 


A basic security measure is using a virtual fence to know when someone is entering or leaving a property. Businesses can set up a geofence and find out in real time if there is an unauthorized person on-site after hours. Geofencing software can even trigger an automatic alert to law enforcement or off-site security teams to investigate further.

Security can also use geofencing technology where there is sensitive information or where devices are forbidden. For instance, IT or security teams can set up a “no-phone” zone using geofencing to know when a mobile device enters an area or disable phones completely within the zone. This can prevent illegal recordings/leaks (entertainment venues, meetings) or keep high-security areas safe (military bases, prisons).

Human resources and workplace safety

Human resource teams and people managers use geofencing in workplaces to automate clocking in and out of work. When employees enter a jobsite, a geofence system can automatically punch in for a worker or send them a push notification on their mobile phone. Managers can also track who’s on-site when employees are in the field from miles away.

Companies can also use geofencing to keep employees safe. For example, businesses can use geofences to create low-speed zones or keep drivers out of dangerous areas on construction sites. Or, if they need to conduct an explosion, they can create a geofence to ensure no workers are within the blast zone.

Location services and safety

Just as geofence technology has been used to track people entering a fenced area, it can help notify people when a person is leaving a physical location. For example, parents can set up geofences around their home, babysitter’s house, or child’s school. When kids come and go from these locations, parents can receive text messaging or other alerts. Similarly, geofencing has been used to protect and prevent persons with Alzheimer’s disease or dementia from wandering away from caregivers.

When combined with home automation apps, geofences can trigger house lights, stereos and TVs, and thermostats. For example, you could set up outdoor lights to turn on if someone enters your property when you’re not home. Or turn your lights on automatically when you’ve entered a geofenced space, so you don’t have to walk into a dark room.

Marketing and advertising

Geolocation data is a valuable tool for a business’ marketing strategy. For example, large retailers have leveraged geofencing and mobile marketing to get customers into their retail stores. When a person who’s downloaded the retailer’s mobile app is within the location of a store, geofencing triggers an alert notifying the person of new products and loyalty points they can spend. 

Another business set up a geofence around a competitor’s location. When a customer entered the area, the business sent an offer to entice the customer away.

Have you ever been to a conference or wedding that had customized Instagram filters or social tags? This is geofencing technology at work. Businesses (and individuals) use social media to personalize experiences. When social media users enter or leave a geofenced area, the venue or event may prompt them to check-in, post and update or image, or share feedback.