Australian retail giants Bunnings and Kmart are being investigated over their use of facial recognition technology in stores, amid privacy concerns.

The Office of the Australian Information Commissioner [OAIC] has confirmed it has launched an investigation after it was revealed the stores were using the technology without the knowledge of customers.

The investigation followed a report from consumer advocacy group CHOICE about the retailers' use of facial recognition technology.

The OAIC is also working with electrical and white goods retailer Good Guys following reports it paused its use of the technology.

CHOICE investigated 25 of "Australia's most-trusted retailers", and found Kmart, Bunnings and Good Guys were "capturing the biometric data of their customers".

CHOICE consumer data advocate Kate Bower called the use of facial recognition by the retailers "completely inappropriate and unnecessary."

"Using facial recognition technology in this way is similar to Kmart, Bunnings or The Good Guys collecting your fingerprints or DNA every time you shop," she said. 

Bunnings' chief operating officer, Simon McDowell, told CHOICE the technology was used to "identify persons of interest who have previously been involved in incidents of concern in our stores".

"This technology is an important measure that helps us to maintain a safe and secure environment for our team and customers," he said.

"We let customers know about our use of CCTV and facial recognition technology through signage at our store entrances and also in our privacy policy, which is available on our website."

Respondents to CHOICE's survey described the tech as "creepy and invasive" while others considered it "unnecessary and dangerous".