The invention is a method of validating a label that includes the steps of reading a product-specific code disposed on an item; retrieving a stored verification code corresponding to the product-specific code; reading a label verification code disposed on a label having a serial number encoded thereon; and determining whether the stored and label verification code match. If the stored and label verification codes match, the label is considered valid. In one embodiment, once the label is validated, the product-specific code and the serial number may be combined to generate a unique item-level identification code for the particular item. The use of the stored verification code and label verification code may help prevent attaching an incorrect label to the item.