It's not just to lookup customer loyalty membership/ ban shoplifters/ prevent some shoppers habitually scanning expensive items like avocados as cheaper ones: Australia has weak protections on that data being shared with data brokers.

Forbes [0] says "Facial recognition is everywhere – but Australia’s privacy laws are ‘falling way behind’"... “It [Identity Verification Services Bill] does not put any brakes on those uses of 1:many facial recognition, outside of the Facial Identification Service (FIS) used by the government,” says Prof Santow. “Clearview AI and many other 1:many facial recognition services will continue to operate in Australia and will not be regulated under the IVS Bill... Santow says it is vitally important to regulate companies scraping data from the internet and developing databases of people’s faces.”

Bunnings and Kmart's 2022 trials [1] of facial recognition technology in stores initially got in trouble with the privacy watchdog (OAIC) and were suspended since Australian law didn't allow doing that without an opt-out and consent of the user (i.e. stores had to have signs and tell customers they were using facial recognition, and how to opt-out). Bunnings insisted it was only being done to recognize and exclude banned customers (shoplifters/violent), and that images weren't retained.

Since then, as you mentioned, [2] Woolworths introduced overhead cameras + AI to detect when items are not scanned correctly, with footage of the scan recorded and played back to the customer instructing them to re-scan. "Woolworths said the purpose is to prevent accidental wrong scans, but it also works as a loss-prevention tool for the supermarket when, for example, a customer scans fresh produce as a cheaper item instead. ... The footage cannot be viewed live but Woolworths said it is retained for training staff. The company said customers’ faces are blurred and pin pads are blacked out."

[0]: Forbes 9/2023 "Facial recognition is everywhere – but Australia’s privacy laws are ‘falling way behind’" https://www.forbes.com.au/news/innovation/facial-recognition...

[1]: 7/2022 "Bunnings and Kmart halt use of facial recognition technology in stores as privacy watchdog investigates" https://www.theguardian.com/technology/2022/jul/25/bunnings-...

[2]: "Woolworths [Australia] expands self-checkout AI that critics say treats ‘every customer as a suspect’" https://www.theguardian.com/business/2023/feb/19/woolworths-...