Protecting Consumer Privacy

By Mark Roberti

Sept. 11, 2006—BusinessWeek recently ran a fascinating article on retail surveillance systems and the enhancements being made to counter organized shoplifting gangs (see Attention, Shoplifters. The article raises some poignant questions about privacy and, indirectly, about the concerns some privacy advocates have about radio frequency identification.

The article says retailers are being beset by gangs of professional shoplifters who snatch large numbers of items and resell them at a discount. As a result, the average loss per shoplifting incident rose to $855 last year, up from $265 in 2003, with theft now costing U.S. retailers $30 billion annually. Retailers are fighting back with new high-tech tools, including smarter video cameras and RF-based systems.


What caught my attention was BusinessWeek's description of Video Investigator, a package "whose advanced surveillance software can compare a shopper's movements between video images and recognize unusual activity. Remove 10 items from a shelf at once, for instance, or open a case that's normally kept closed and locked, and the system alerts guards sitting in a back room—or pacing the sales floor—with a chime or flashing screen."

This raises some interesting privacy questions. Stores clearly have the right—even a fiduciary duty—to try to reduce shoplifting and employee theft. But how far should they go in terms of using technology to examine the behavior of customers? And how far should they—can they—go in terms of informing customers of what they are doing? (You want to tell your customers they are being watched without tipping off the thieves.) It's one thing for consumers to be watched by the six million video surveillance cameras BusinessWeek says U.S. retailers have installed. It's another to know that software is being used to analyze behavior and, perhaps, to remember faces.