Retail giant Kmart has been called out for "playing fast and loose" with customers' privacy by scanning the faces of unwitting shoppers at dozens of 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 stores to capture every person who entered and again when they lined up at a returns counter.

The pilot program included stores within all Australian states and territories, except the Northern Territory and Tasmania.

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

"I do not

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