The Internet Eyes website will reward viewers with cash if they spot and report shoplifting or other crimes in progress.
The scheme, which is due to go live in Stratford-upon-Avon in November, will stream CCTV footage from inside and outside shops to subscribers' homes.
If viewers see a crime in progress, they can alert the site's operator, who then decides what action to take.
Players are awarded one point for spotting a suspected crime. Those who help catch the most criminals each month can win cash prizes of up to £1,000.
Retailers in Stratford have welcomed the scheme, saying it could act as a deterrent once 'Internet Eyes patrol here' signs are displayed.
The site's founder, James Woodward, said it could lead to a dramatic fall in crime. "There are more than four million CCTV cameras across the UK but only one in a thousand gets watched. This way the cameras will be watched by lots of people."