Ethics Center: Business Ethics

The Four Perils of Buying Phony Online Reviews

In the old days—say, 15 years ago—consumers checked with friends, family, and consumer reports before making major purchases. Today, they consult online reviews . . . and not just for major purchases. According to the 2011 Cone Online Influence Trend Tracker, 55 percent of consumers do online research after receiving a purchase recommendation for a new car. But nearly 50 percent also do so before selecting a restaurant, and roughly 38 percent before buying footwear or apparel.

The growth of online research puts tremendous pressure on businesses to be viewed positively, leading them to buy positive reviews from consumers or bloggers in order to gain an edge over competitors. Although this might be effective from a marketing perspective, it’s potentially catastrophic from an ethical one. Would you trust a company that hires people to write fake reviews about them? And would you buy from such a company or recommend them to your friends?

Apparently, these concerns aren’t stopping thousands of small businesses from attempting to game Yelp, TripAdvisor, Google+ Local, and other consumer-review web sites. They either commission fake positive reviews or generate phony negative reviews on their competitors. And they’re doing this without considering the ethical implications or the potential negative consequences.

Questions about the legitimacy of consumer-review sites has been building for years. In 2008, Bing Liu, a data-mining expert at the University of Illinois, discovered that 60 percent of Amazon reviews rewarded five stars, with another 20 percent giving four stars, far more positive than a normal distribution curve would indicate. According to the New York Times, book authors used a marketing service——to write and place 4,531 phony reviews. Some authors paid as much as $999 to receive 50 reviews of their books. Even more troubling is a recent study by Gartner, a leading technology research firm. The study projects that by 2014, 10 percent to 15 percent of online reviews will be fake and paid for by companies.

One reason why companies are willing to ignore ethical concerns is that online reviews literally make—or break—them financially. For instance, a 2012 study by PR firm Weber Shandwick found that 83% of consumers say online reviews influence their perception of a company, and the Cone study revealed that 80% of consumers changed their minds about purchasing a product or service as a result of reading negative information online. Conversely, 87% strengthened their commitment to buy after reading positive information. What’s more, a University of California study found that a Yelp rating increase of just half a star (on a scale of one to five) increased the likelihood of a restaurant selling out its 7:00 p.m. booking from 30 percent to 49 percent,

So how do you resist the siren’s call to game the consumer-review sites? By becoming aware of the downside risks of doing so. Here are four of them:

  • The review sites are getting more aggressive about flagging fake reviews and shaming companies who purchase and/or post them. For instance, Yelp recently began posting consumer alerts on the listings of companies that buy fake reviews. Here’s what the alert says: “We caught someone red-handed trying to buy reviews for this business. We weren’t fooled, but wanted you to know because buying reviews not only hurts consumers, but also honest businesses who play by the rules. Check out the evidence here.” Consumer can then click through to see the incriminating evidence (example: a Craig’s List ad recruiting writers to post fake reviews). Would you want your prospective or current customers to see this alert on your listing? Worse, would you like to be temporarily or permanently banned from a major review site, have your account suspended, or see you firm place lower in search rankings? All of these things are possible if you’re caught purchasing fake reviews.

  • The government has tighter regulations on paying affiliates or other parties for testimonials or reviews. Under a U.S. Federal Trade Commission (FTC) 2009 rule, a positive review or article by a person connected to the seller must disclose the material connection (compensation) between the reviewer and the seller of the product or service. Since then, a number of companies have been fined or sanctioned for violating the rule, including Legacy Learning Systems, a Tennesse-based companies that sells music instruction DVDs. The company was fined $250,000 for paying marketing affiliates to pose as regular customers and write positive online reviews.

  • Consumers are quicker to lose faith in a company who does something unethical. If they discover that you are trafficking in phony consumer reviews, they will immediately stop trusting in you and begin spreading negative word of mouth. This may lead to a reputation crisis and breakdown of your entire marketing program. This is something your business can ill afford to happen. 

  • Finally, online reviews have become an important component of online (and offline) commerce. By posting illegitimate reviews, you will ultimately undermine consumer faith in these sites, thereby increasing their uncertainty and hindering their due diligence efforts. Selling to fewer consumers and waiting longer for sales to close is not a recipe for financial success.

So don’t tempt fate by posting fake consumer reviews, either for your own company or for a competitor. It’s unethical, can lead to costly fines and legal expenses, and can undermine your sales process and reputation long term. Rather, gain positive reviews the old fashioned way—by delivering a great product or service and exceeding consumer expectations in every way.