The software company, Facewatch, deleted Mr Hadley’s image from its database after he had proven his identity to the company and the CCTV had been checked manually.
Mr Hadley agreed the fraudster, who had been at the till at the same time he had been paying, “looked very similar” to him.
“I get it was a human error and people make mistakes,” he said.
“But, when those mistakes can result in people who have done nothing wrong being put on a national database, there needs to be some more checks and balances.”
Madeleine Stone, from the civil liberties campaign group Big Brother Watch, said using software like Facewatch to deal with shoplifting was a “recipe for disaster”.
“You could be blacklisted from your local shops, placed on a secret watchlist, and that information is shared in all the shops in your area,” she said.
“There is not necessarily any evidence of wrongdoing and there is no due process.
“Many people have been really impacted by this.”
A Facewatch representative told Mr Hadley that avoiding wrongly including individuals on its database was “of the highest importance” to the company.