Reviews Are Broken, And They’re Costing Us All Money

Danielle Beurteaux

Amazon made news recently when reports surfaced that the company has launched a lawsuit against product reviewers who were paid to create fake reviews. Via the site Fiver, the reviewers, 1, 1114 of them, were paid $5 a pop to wax lyrical and positive about products they’d never used. Some arrangements even went so far as to ship empty packages to a “reviewer” to create a shipment trail for Amazon, which allowed the reviewer to use their “verified reviewer” status badge.

Amazon actually first began this process back in April by suing some of the owners of sites where “reviews” could be purchased.

While Amazon has been lauded for taking steps to banish fakes, suing might not be the best route to regaining consumer trust.

Consumers are on the fence about trusting reviews

Some, while supporting Amazon’s move, don’t think it will actually achieve much. And while we probably look at reviews out of habit at this point, not everyone trusts them. One study found that only 57% of consumers trust positive reviews, and 49% think reviewers are in some way compensated.

Researchers at Cornell University invented an algorithm to detect fakes. As one of the researchers noted, people tend to fall prey to what’s called truth bias—it’s sort of our default pro-trust mechanism.

The program immediately attracted attention after researchers published a research paper on what they’d done, and several major travel and e-commerce sites expressed interest.

You can try it out for yourself. It’s called Review Skeptic (just mind the note at the bottom—best for hotel reviews in English).

The economic casualties of fakes

Consider this restaurant owner in Oxford, England, who claims he was the target of fake and negative reviews on TripAdvisor. The review site removed the review after he complained—his restaurant was one of several in his city that had received a very similar review posted on the same day, which aroused his suspicions. As a small business owner, he knows that good online reviews in a tourist destination like Oxford are integral to keeping the doors open.

The sites the provide fake reviews are so fly-by-night—they shut down and new ones appear faster than anyone can keep track—and the work so simple that fakes can be produced anytime, and anywhere. Tracking miscreants via IP addresses only goes so far—sometimes only as far as a VPN.

Amazon is setting a good precedent, and it can afford to. But think of those small business owners whose only reputation management team is themselves. According to this Washington Post article about TripAdvisor.com, some of the larger hotel chains have staff members whose job is to manage and respond to reviews. Then there’s the small inn whose owner who is quoted as saying she feels sick when her business receives a negative review.

Research from the Harvard Business School, published in the journal Management Science, focused on Yelp reviews (and using data supplied by Yelp), and shows that the incidence of fraudulent reviews has been increasing and that more competition increases the likelihood of fraud occurring.

A rating increase of a single star can mean a 5% increase in business—no small number for an independent business. The paper’s researchers call it an “arms race in the review industry” (and note the word “industry,” which puts to bed the idea that this is an organic, grassroots response system).

The economic impacts ripple out to everyone, from businesses that lose customers due to negative reviews to consumers who waste money by basing purchasing decisions on fake reviews and end up with a product or experience that’s disappointing, bad, or non-functional. Not to mention the trust that is diminished every time we read about fake reviews.

For more insight on social marketing strategies, see Brand Storytelling: Where Humanity Takes Center Stage.

 


Danielle Beurteaux

About Danielle Beurteaux

Danielle Beurteaux is a New York–based writer who covers business, technology, and philanthropy. Her work has appeared in The New York Times and on Popular Mechanics, CNN, and Institutional Investor's Alpha, among other outlets.