Woolworths chief executive Brad Banducci says he is outraged that some customers were billed twice because of an error made by a payments processor.
Disgruntled shoppers raised the issue on Woolworths' Facebook site with some claiming the double dipping also incurred them "overdraw fees".
Woolworths on Tuesday confirmed that customers who paid with a VISA card between March 11 and 13 were charged a second time on August 6.
Mr Banducci said it was because of an error by CUSCAL, a company that processes payments for more than 80 financial institutions.
"We are outraged on behalf of our customers that this has happened and it raises a series of important questions about the effectiveness of certain processes in the financial system," he said in a statement.
He said the charges appeared in customers' bank statements on Monday as if they had been charged twice by Woolworths.
"Woolworths was not involved in this error, and was completely unaware of it until we were contacted by our customers," he said.
"We don't know which of our customers have been affected because the relevant encrypted data is held only by the financial services companies."
He said the group is responding to customers who contact Woolworths' customer service centres and through social media.
On Woolworths' Facebook site, Charlie Hooper said: "I've got my refund but ... it took me into overdrawn territory and I'm now down the associated fees".
Another customer, JJ Hinfelaar, said: "Are Woolworths also going to refund any fees associated with this mistake? Your stuff up will cost many customers more than just the amount deducted".
Woolworths responded to JJ saying CUSCAL is working on addressing any additional fees.
The retailer said CUSCAL had confirmed that affected customers would be refunded by 1400 AEST on Tuesday.
