Fake Reviews Negatively Impact Online Sellers In The Billions

Monday, November 1st, 2021

With e-Commerce exploding, online customer reviews have become paramount in influencing the ultimate buy decision from the customer. 

The outbreak of COVID-19 last year brought stringent social distancing regulations and the shut-down of many brick and mortar businesses. It drove millions to shop online from home, many for the very first time. 

Amazon, the largest online retailer in the world, saw its written product reviews double, almost overnight. Popular retailers such as Target and Walmart also experienced a surge in the number of reviews on their websites. 

The Power Of The Customer Review

When shopping online, customers are unable to visit the store in person to see and touch the product themselves. It is only understandable that they would rely on other customer reviews to answer the questions they may have. Before they part with their hard-earned money, they need to know that the product delivers on its promises and the customer’s needs. 

According to The Future of Commerce website, 61% of customers read online reviews before they made their decision to purchase.

For marketers, customer reviews are an excellent feedback loop, a gold mine of data that can be used for a number of purposes.  They can gather product development ideas, use them as a source for “competitive intelligence”, and build trust and customer engagement. 

Simply put, “user-generated reviews” are powerful tools that can ultimately sway the buying decision, especially for high-ticket items. 

Online reviews basically serve two purposes: 1. Bring customer awareness to a product and 2. Influence them to purchase the product.

It goes without saying that, although online reviews are very helpful in informing a potential client to purchase, the review must be gauged for honesty and legitimacy. This brings us to the next point.

Fake Reviews: The Online World’s Dark Side

While online reviews have proven to be critical to a consumer’s buying decision, what has been brewing in the shadows is the work of unscrupulous players wanting to cash in on the power of online reviews, by generating fake product reviews.

A report conducted by Which?, the largest independent consumer organization in the UK, found a “thriving industry of review manipulation businesses” that were targeting the Amazon marketplace as well as dodging its checks by gaming its system.

It specifically found a German company, AMZTigers, which gloated over having 62,000 reviewers, with more than 20,000 in the UK alone. Individual reviews go for £13 each as well as bulk review or vote packages from £620 for 50 reviews, up to a staggering £8,000 for 1,000 reviews.

Since the competition on Amazon is fierce, more sellers are looking to experts that offer review manipulation services. This includes providing free or discounted products in exchange for reviews and sales campaigns for sellers to increase their positive reviews. 

Amazon strictly prohibits sellers from paying third parties in exchange for garnering reviews. For those that violate these policies, Amazon has stated that the ban, suspend, and will take action against them. 

It was found that the leading e-commerce sites in the world, including TrustPilot, Yelp, Trip Advisor, and Amazon had a total of 4% fake online reviews. If you translate that into financial impact, this comes out to $152 billion of global spending due to these fake online reviews.

Merchants Must Take Action

Businesses can be proactive in tackling these issues head-on by utilizing customer acquisition security technology to make sure all marketing efforts are being directed towards potential customers and not malevolent bots. 

Also, merchants must continue to educate themselves on the damaging effect of fake online reviews on their reputation and their business. Finally, merchants must be vigilant in identifying and wiping out all fake reviews before they make a significant impact and erode customer trust.