"It's outrageous…absolutely outrageous," Richard Evans, executive director of the Australian Retailers Association (ARA), told ABC Radio.
"It diminishes not only those folks who wear those outfits, but diminishes all of us."
Scott Driscoll, Queensland retail association's executive director, said Thursday that veiled customers should be banned from entering shops and banks.
"It's about a garment being used by potentially unscrupulous elements in our society to obtain these garments for the wrong purposes, use them as a guise or a disguise to get away with perpetrating crimes ... that is what this is about."
Driscoll claimed that supporters of face-veil adopt a political correctness that has gone mad, an accusation rebuffed by human right groups.
"Showing respect for different religious beliefs is not political correctness, it's appropriate in the multi-cultural community we have in Victoria," said Helen Szoke, Victorian Equal Opportunity and Human Rights Commission Chief.
The Victoria federal government said that the veil ban call was "unacceptable".
"The Government would not consider such a ban to be acceptable," said a spokeswoman for acting Prime Minister Julia Gillard.
The majority of Muslim scholars believe that a woman is not obliged to cover her face or hands.
They believe that it is up to every woman to decide whether to take on the face-cover or not.
Muslims, who have been in Australia for more than 200 years, make up 1.5 percent of its 20-million population.
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