Toys that could damage eyes and choke young children, and cosmetics that could trigger allergic reactions, are among the potentially dangerous products that have landed Japanese discount store Daiso in court.

The chain, which has 29 Australian stores and sells most of its items for a flat price of $2.80, faces fines and could be banned from selling some products if Consumer Affairs Victoria's Federal Court action is successful.

Court documents show consumer regulators seized thousands of items from Daiso stores in Victoria, NSW and Queensland between 2013 and May 2016 which allegedly breached safety standards. They allegedly included: