The microchips inside Birmingham's 400,000 wheelie bins are to be used for the first time so council chiefs can keep a track of refuse collection.
It will enable refuse service bosses to record accurately when and where bins are emptied and is expected to help towards a £3 million-a-year saving.
But council chiefs claim the chips will not be used to make a note of how much waste each household produces.
Coun Lisa Trickett, Labour cabinet member for sustainability, has ruled out using the technology to introduce 'pay-as-you-throw' charges.
The chips, which work in a similar way to shop barcodes, are already installed in the bins and each number has been recorded so that bins can be returned if lost.
But later this year they will be used for the first time to record the emptying of the bins, allowing bosses and call centre staff to see immediately whether a collection has been missed.
It forms part of a £3.5 million IT upgrade of the bins service, carried out last year, which includes iPads and cameras in dust carts, allowing binmen to give live updates to depots.
For the last two years, the city council has been inundated with complaints about missed collections, firstly in 2014 when green waste collection charges were introduced and then last autumn as wheelie bins were introduced in the north of the city.
Crews were using paper lists of households to check who had paid the £35-a-year garden waste charge.
Bosses hope that more accurate recording and monitoring will enable them to plan routes better, which will save on fuel and time wasted on the road going back and forth to depots, avoid missed collections and keep residents better informed.
Coun Tricket said: "Back at the start of the wheelie bin project in 2013, we took a thoughtful and long-term view to fit the city's wheelie bins with chips to ensure they were future-proof.
"This decision is now bearing fruit as we will be able to use them in conjunction with IT being fitted into vehicle cabs to track refuse collections and citizen enquiries in a much better way than ever before.
"We will have certainty over what bins have been presented for collection and better planned round routes, ensuring we collect refuse on time. This is what citizens rightfully expect us to do.
"The upfront investment cost will enable us to make budget savings through increased efficiency, which is absolutely essential at a time when council resources are being reduced by central government and we need to re-imagine how we do things within the funds available.
"I would like to reassure residents there is absolutely no intention to use the chips to introduce a 'pay-as-you-throw' service. We have been clear on this since the introduction of wheelie bins and that very much remains the case."
UK councils began introducing chips in bins just under a decade ago and so far none has introduced the feared pay charges.
* Wheelie bins already have a microchip embedded in them, installed during the manufacturing process. A £30 million Government grant covered the costs of introducing wheelie bins, new lorries and upgrading depots and IT. In return, Birmingham committed to weekly collections for five years.
* Collection staff will have a reader to identify the number as the bin is being emptied. It has been likened to a supermarket scanner checking a barcode. The database is then updated immediately. The council insists the only data being recorded is that the bin has been collected.
* Cameras in the dustcarts, there to ensure safety when negotiating narrow streets and parked cars, can also be used to record where and if bins were put out by householders.
* There are fears the technology could be used in the long term to measure the amount of waste produced by each household but this would require a significant investment to fit dust carts with weighing technology.
* It could also be used to reward those who recycle. A loyalty points scheme was considered following a short-term trial with the Nectar card for paper recycling in Erdington and Bournville five years ago but this has not been developed.
* The rollout of wheelie bins across the city was completed last month and councillors are expecting to see an increase in recycling as a result. This is after a sudden dip following the cancellation of free garden waste collections in 2014.
* The city council is looking at the longer term future for refuse and recycling in the city. Its key £35 million Tyseley Incinerator contract with Veolia ends in 2019.
* The Future Waste Strategy is currently being developed and is looking at how the city can raise its recycling rate from 26 per cent today to nearer 70 per cent. Options which could be looked at include privatising the bins service as many other authorities have done. There are also calls for food waste collection.