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AI failures · Incorrect automated decision

Rite Aid — FTC Bans Facial Recognition Surveillance for Five Years After False Shoplifting Matches

Verified Checked against its sources on 2 sources quoted

Where it happened
United States
Organization
Rite Aid Corporation
Date
FTC complaint and proposed order announced December 19, 2023; stipulated order filed March 8, 2024
Function
Retail / Loss Prevention
Where it happened
Loss prevention; customer identification
System
AI-based facial recognition system supplied with the help of two vendors
Technology
Machine learning
Type of failure
Incorrect automated decision
Caught by
A regulator

Summary

According to the FTC's complaint, Rite Aid used AI-based facial recognition from 2012 to 2020 to flag customers as suspected shoplifters. The system produced thousands of false-positive matches, and staff acting on the alerts followed, searched, ejected or publicly accused customers and sometimes called the police; false positives were more likely in plurality-Black and Asian neighbourhoods. Under a settlement announced December 19, 2023, Rite Aid is barred from using facial recognition for surveillance for five years and must adopt safeguards for automated biometric systems.

Consequence

  • Five-year ban on using facial recognition technology for surveillance, under a settlement of FTC charges
  • Stipulated order for permanent injunction filed in the FTC's federal court case on March 8, 2024

Who caught it A regulatorFound outside the organization

Analysis

What could have been done

Checking AI output against its sources

Every factual element of AI output (citations, figures, quotations) is checked against its source before reliance.

According to the FTC, employees acting on false-positive alerts followed customers, searched them, ordered them to leave and called the police to confront or remove them.

Monitoring and escalation

Error rates, overrides, complaints and drift are monitored, with thresholds that trigger escalation.

The system ran from 2012 to 2020 and, per the FTC, produced thousands of false positives, more often in stores in plurality-Black and Asian communities; the problem was surfaced by the FTC's investigation.

What would likely have prevented it

  • Treat a match alert as a lead only, and require a defined confirmation by a trained person before any action is taken against a customer.
  • Before rollout, test false-positive rates across store locations and demographic groups against acceptance criteria set in advance.

What would likely have caught it earlier

  • Log every alert and its outcome (confirmed, false, no action) and review false-positive rates by store and area, escalating when a location's or group's rate exceeds a set threshold.

Related reading Most Documented AI Failures Were Found by Someone Else

Key dates

  1. December 19, 2023Event
  2. October 16, 2026Checked against sources
  3. October 18, 2026Checked against sources
  4. October 21, 2026Checked against sources

Developments are added when the record is reviewed. Next review: October 16, 2027.

Evidence

Each passage is quoted from its source. The quoted passages are re-checked against the live pages every month.

  1. Rite Aid will be prohibited from using facial recognition technology for surveillance purposes for five years to settle Federal Trade Commission charges that the retailer failed to implement reasonable procedures

    Supports: Five-year ban; FTC settlement; date December 19, 2023

    Rite Aid's facial recognition technology was more likely to generate false positives in stores located in plurality-Black and Asian communities than in plurality-White communities

    Supports: Disparate false-positive rates

    Employees, acting on false positive alerts, followed consumers around its stores, searched them, ordered them to leave, called the police to confront or remove consumers

    Supports: What staff did on false matches, including calling the police

    Rite Aid Banned from Using AI Facial Recognition After FTC Says Retailer Deployed Technology without Reasonable Safeguards Federal Trade Commission Primary source

  2. March 8, 2024 File Stipulated Order for Permanent Injunction and Other Relief

    Supports: Stipulated order filed March 8, 2024

    Rite Aid Corporation, FTC v. (case page) Federal Trade Commission Primary source

Suggested citation. Eminence Scan, “Rite Aid — FTC Bans Facial Recognition Surveillance for Five Years After False Shoplifting Matches”, Eminence Growth Solutions, last verified October 16, 2026, https://eminencegrowthsolutions.com/tools/eminence-scan/record/fail-025/.

Using our research: you may read and quote Eminence Scan with credit to “Eminence Scan, Eminence Growth Solutions” and a link; all other rights reserved. Terms: Using our research.

Spotted an error, or a development we have missed? Report a correction. How we check records: research methodology.