Should You Pay for Consumer Reviews?

Pay for Consumer Reviews

Have you offered to pay for consumer reviews or offered discounts on future purchases? It might seem tempting, but this can REALLY hurt your local business.

In today’s post, we answer a great “Ask Us Anything” question that came in from G in Atlanta:

“My mechanic gave me a card the other day stating they would pay me for online consumer reviews. I know this is explicitly prohibited by many of the online directories, however, I’d like to know if you have first hand knowledge or research about companies that have been caught doing this and what the directory did, if anything, to their reviews or directory listing. Thank you!”

There are really two issues around paying or otherwise financially incentivizing people for reviews.

From the legal angle, we’re dealing with the Federal Trade Commission (FTC). It is not illegal to compensate someone for consumer reviews / endorsements. However, the key here is DISCLOSURE. The person making the review or endorsement MUST disclose on the review that they received some form of monetary or non-monetary compensation. And if the company paying for the reviews uses them on their site, social media, or other marketing efforts, they must disclose that the person making the review was compensated.

Here’s an example where the FTC went after a company in Peachtree, GA for this very issue:

The other angle is the policies of online search engines and business directories. Google, Facebook, Yelp and others all make it very clear that they do not tolerate consumer reviews that are compensated. Part of this is that THEY could get in trouble with the FTC, but the other part is that they want their own users to have a safe, trusted experience.

These companies are constantly developing and tweaking algorithms to catch paid consumer reviews. If you pay or otherwise compensate for online reviews, you risk Google, Facebook, Yelp, and others penalizing or banning your company completely from their site. Obviously that is VERY bad for your business and once you get banned, it is extremely difficult to get re-listed.

Here’s an example of where Yelp specifically went after companies who compensated people for reviews:

Yelp Consumer Alert

Google and Facebook are just as aggressive. BTW, even contests that offer people a chance to win a “free” something or money off where the “cost of entry” is a review or rating is considered a violation of these guidelines.

Bottom line, a company may be able to get away with compensating people for reviews for a while, but they are playing Russian roulette and risking getting their business penalized or banned from important online search engines and directories, and even risking legal action from not only the FTC, but local business authorities as well.

It’s just not worth the risk. Focus instead on just asking your customers to let you know how you’re doing on one of the popular reviews sites. It will be much better for your business in the long run.

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