Salvation beyond mere forgiveness

Chapter 2 of The Divine Conspiracy by Dallas Willard raises an excellent question about forgiveness.

He points out that the bar code on a product is the only thing recognised by a scanner. The nature of the item itself is irrelevant. It could be a haggis or a pomegranate, but if the bar code says it's a tin of baked beans, than the scanner treats it as a tin of baked beans. Salvation is sometimes reduced to a similar process. It doesn't matter who or what we actually are. At the gates of heaven, providing we are labelled with the bar code 'forgiven sinner' we will be admitted.

The question Willard asks is this (my paraphrase): Does the salvation Jesus came to bring consist merely of slapping the right label (e.g. "born-again Christian") on our lives, without any attempt to address the fundamental nature of the human being underneath the label? Isn't it the work of God to transform lives - which involves far more than just forgiving sin?

I'm a great believer in free grace. We don't earn our salvation. It is a free gift of God. But I need to be careful when I preach grace not to give the impression that it is acceptable to leave our lives and lifestyles unreformed.