The AFR is reporting that Kmart will likely be found to have breached Australia’s Privacy Act over its use of facial recognition at 28 stores between June 2020 and July 2022.

The Office of the Australian Information Commissioner (OAIC) is set to rule that customers were not properly notified or asked for consent before their biometric data was captured.

The regulator is also understood to have considered the technology ineffective in reducing refund fraud, while impacting the privacy of thousands of shoppers who were not suspected of wrongdoing.

Kmart paused the program in 2022 after investigations began. It is expected the retailer will be ordered not to reinstate the technology and to publish details of the ruling on its website within a set period

That noted, the commissioner has previously stressed these decisions do not amount to a blanket ban on facial recognition. However, any use must meet privacy law requirements.

Kmart argued that it trialled facial recognition in response to rising retail crime.

Company figures provided during the inquiry cite an 85% jump in refund-related threatening incidents and a 28% rise in other threatening incidents between August 2024 and March 2025.

As Channel News has regularly reported, Australian retailers, especially those in Victoria, are frustrated by a crime wave that is proving difficult to bring under control.

Several high-profile retail industry figures have argued that retailers should have a freer hand to deploy technology, especially if it can improve staff safety.

It seems Australian retailers hands are currently tied when it comes to deploying facial recognition tech.

Wesfarmers CEO Rob Scott recently argued that retailers “should be able to better leverage technology in a responsible way to make our society safer – to make our workplaces, and the places where people go, safer”.

This latest ruling follows the determination that Bunnings breached privacy by using facial recognition across more than 60 stores.

Bunnings has said it will seek a review of that determination in the Administrative Review Tribunal.

The OAIC has also previously acted against 7-Eleven for capturing faceprints during in-store surveys and ordered the destruction of those images.

The OAIC’s published guidance for retailers considering facial recognition emphasises necessity and proportionality, meaningful notice and consent, governance, and ongoing assurance, as well as assessing whether less intrusive options can meet the same objective.

To reiterate, the use of facial recognition technology has not been banned. However, after the rulings in relation to 7-Eleven, Kmart and Bunnings, it seems there is a high bar to clear.

If an Australian retailer can’t demonstrate that broad biometric capture is necessary, proportionate and transparent, and that less intrusive alternatives were seriously tested, they can expect to hear from the OAIC