Retail giant Kmart has been pinged for breaching shoppers' privacy by scanning the faces of unwitting customers returning products at dozens of its stores.

Privacy Commissioner Carly Kind found the company in breach after it collected people's personal and sensitive information through a facial-recognition technology (FRT) system designed to tackle refund fraud.

Between June 2020 and July 2022, Kmart used the technology at 28 of its stores to capture every person who lined up at a returns counter.

"Relevant to a technology like facial recognition, is also the public interest in protecting privacy," the commissioner said on Thursday.

"I do not consider that (Kmart) could have reasonably believed that the benefits of the FRT system in addressing refund fraud proportionately outweighed th

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