Abstract: A system for dispensing, receiving, and tracking towels or other items includes a cabinet structure having first and second interior spaces. An access door provides access to the first interior space, and a return door permits items to be returned to the second interior space. An RFID system conducts read operations to determine how many items having RFID tags are disposed in the first and second interior spaces. The system determines what items have been removed from the first interior space, and associates removed items with specific users. The RFID system conducts read operations as items are returned to the second interior space and credits the user.