Kmart breached privacy laws by collecting personal and sensitive information. Photo: Mick Tsikas/AAP PHOTOS

Retail workers and shoppers are pitted against each other in a feud over surveillance technology.

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Kmart breached privacy laws by collecting personal and sensitive information through a facial-recognition technology system designed to tackle refund fraud between 2020 and 2022.

Privacy Commissioner Carly Kind knocked back Kmart's argument that it did not need to obtain customer consent due to a legal loophole allowing it to collect the information to tackle unlawful activity.

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