First of all, almost any facial surveillance system would simply reject images like those from Lord & Taylor's. The pixel density is simply too low to even attempt plus the downtilt would also likely trigger a rejection. That's how facial recognition does work in practice.

Even if the system would allow it, not only would false positives be enormous, you'd probably miss the match as well (false negative).

Not impossible though. Given that such software is used to steer the future efforts of the investigators, it is possible that the software does say "no match found" if the probability of a real match is too low.