Jinx Hundal had installed Internet Eyes in three of his Budgens stores in East Anglia in early March as a means of protecting his businesses. However, Jinx decided to stop using the system after just a week when complaints over shoppers' privacy were raised at his monthly customer forum meetings.
Jinx said: "The last thing I wanted to do was upset my customers. I have spoken to customers via our customer forum and there have been concerns raised, with several saying they were uneasy about being viewed by members of the public."
Internet Eyes allows members of the public to view CCTV systems of businesses that have signed up to the scheme and report any crimes they see taking place by text message. The scheme offers monthly rewards of up to £1,000 for the person who reports the most crimes.
Jinx said that in the week that the system had been active he had received 12 alerts from it, with one being relevant to an actual shoplifting incident.
He added that he would now have to explore other avenues to detect and deter shoplifters.
Internet Eyes founder Tony Morgan said: "We are of course disappointed that Jinx has decided to stop using the scheme.This is the first time a retailer has done this. We sympathise with Jinx who was forced into a difficult situation when he only wanted to protect his stores.
"Internet Eyes is not about invading privacy, but making people aware that CCTV systems, which are already in place in stores, are being monitored."