I've heard that RFID doesn't work around metal and water. Does that mean I can't

No. Radio waves bounce off metal and are absorbed by water at ultra-high frequencies. That makes tracking metal products or those with high water content problematic, but good system design and engineering can overcome this shortcoming. Low- and high-frequency tags work better on products with water and metal. In fact, there are applications in which low-frequency RFID tags are actually embedded in metal auto parts to track them.

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