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The rigorous characterization of ultrahigh-frequency passive radio-frequency identification (RFID) tags is a challenging but mandatory task. Indeed, tags are the most critical devices in RFID systems: their performance should be adequately good, although stringent requirements in terms of compactness, used materials, and costs must be satisfied. Factors such as the goodness of the conjugate impedance matching between the chip and the antenna, the chip sensitivity, and the quality of the backscattered signal affect tag performance. Tag sensitivity and differential radar cross section (RCS) are the most significant metrics for tag characterization: they define the forward (from the reader to the tag) and the backward (from the tag to the reader) link reliability, respectively. Nevertheless, measurement of such metrics cannot be approached with conventional methods based on vector network analyzers or conventional RFID readers. Vice versa, commercially available instrumentation and solutions are very expensive and not totally flexible. In this paper, a novel approach for performance characterization of RFID tags is explored. To this end, we developed a very cheap (below $1000) and flexible tool based on software-defined radio, which enables measurement of tag sensitivity and differential RCS. An exhaustive experimental campaign has been carried out on ten commercial and four built-in laboratory RFID tags. Achieved results demonstrate the flexibility, accuracy, and appropriateness of the proposed approach.