face, Retail

Face recognition in retail

Walmart’s Use of Sci-fi Tech To Spot Shoplifters Raises Privacy Questions (Fortune)

The only company that acknowledged using the software was Walmart. According to a spokesperson, the retailer tested facial recognition software in stores across several states for several months, but then discontinued the practice earlier this year.

“We were looking for a concrete business rationale … It didn’t have the ROI,” or return on investment, the spokesperson says.

Retailers and biometrics companies have been working together for years trying to figure out how to apply face recognition to the problem of shoplifting. As expected in a retail business, it all comes down to Return on Investment (ROI).

First, here’s what modern shoplifting looks like. It isn’t just teenagers pocketing lip-sticks and candy bars.

Police bust ‘amazing’ $15,000-a-day shoplifting ring (USA Today)

HAZEL PARK, Mich. — Police say a 7,600-square-foot warehouse served as the business hub for a sophisticated, multimillion-dollar theft ring that stole items from southeastern Michigan retailers and resold them on the Internet.

Veteran investigators said the shoplifting ring, which swiped as much as $15,000 a day in over-the-counter drugs and other goods from area stores, is the largest they have ever seen.

Oakland County Sheriff Michael Bouchard called the illegal business “amazing in size and scope” and one that likely operated for years before drug investigators spotted it last month.

The ring operators stored stolen items in the warehouse and sold them on the Internet through eBay, Amazon.com and other sites, investigators said.

Read the whole thing. Criminal organizations like these cause huge losses to retailers, higher prices to consumers, and increased production of dangerous street drugs. More and more, shoplifting is an organized crime problem, and everyone who isn’t in on the scam pays the price in one way or another.

Privacy issues associated with facial recognition in businesses open to the public get a lot of well-deserved attention. Clearly, facial recognition technology could be deployed in businesses open to the public in ways that are injurious to a reasonable person’s expectation of privacy. Brainstorming those ways, however, takes us pretty far away from the ROI calculation that is motivating retail outlets to seek out technologies that can help them reduce losses due to theft.

The privacy focus for facial recognition in retail spaces should be on what data is collected and what happens to it. In this case that means the photos and personal information that goes along with them. The easy part is that retail establishments have been collecting information on suspected shoplifters for a long time now and they already have policies about what they collect, when they collect it, and how long they retain it. The hard part is that new facial recognition technology makes sharing the information easier, securing it more difficult (and important!), and it requires new training for loss prevention staff about what, exactly, the technology is telling them.

That brings us back to the ROI. Obviously, using facial recognition to prevent a $15,000 organized crime heist helps the ROI calculation. Using facial recognition to interrupt a shopper based upon a “false positive” ID hurts the ROI calculation. So there’s at least a little bit of good news here for privacy: The ROI calculation that is so important to the business’s decision whether or not to use a facial recognition system does have a built-in way to account for at least some privacy concerns.

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