By 2023, experts estimate that 91% of Americans will shop online. Of those who are already online shoppers, nearly two-thirds of consumers rely on mega retailers such as Amazon.com. While this eCommerce boom is in full swing, consumers are having to turn to different tactics when deciding which products to purchase.
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Whereas those decisions used to be made in brick & mortar establishments like shopping malls, today’s consumer doesn’t have the opportunity to touch, feel, try on, or test a product before spending money on it. Instead, today’s consumers have turned into internet researchers.
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For example, the typical online purchase involves research into things like:
- The reputation of the brand;
- Which online retailer offers the lowest pricing;
- Which online retailer will deliver the product fastest; and
- Whether the product has received positive product reviews from a high number of other purchasers.
The Business Of Online Reviews
Of the above-listed factors, product reviews seem to hold particular importance with eCommerce shoppers. Indeed, 84% of online purchasers say they trust online reviews as much as they trust recommendations from friends. But should they? Isn’t it possible that some (if not all) of those reviews are fake?
To ameliorate this concern, sites like Amazon have gone to the trouble of setting up review verification systems. Indeed, if you’ve ever scrolled through product reviews on Amazon, you’ve undoubtedly noticed that several of the reviews will include a “Verified” banner. So, what does that mean?
According to Amazon, “An ‘Amazon Verified Purchase’ review means [Amazon has] verified that the person writing the review purchased the product at Amazon and didn't receive the product at a deep discount.” Sounds great, right? Who wouldn’t trust a verified review?
Well, maybe you shouldn’t. It turns out that even verified reviews can be purchased online from “professional” reviewing companies. Alternatively, many of the third-party retailers (“TPRs”) on Amazon actively recruit people to provide positive reviews of their products and customer service. To the consumers who rely on them, these so-called “Black Hat” reviews are indistinguishable from other reviews. But the deception doesn’t stop there.
A TPR seeking a leg up over a competitor who is selling the same product via Amazon can actually purchase a negative review of that person’s product or service. This not only has the effect of swaying consumer purchasing decisions, but may also impact Amazon’s decision as to which seller of a particular product will be the default seller at any given time (a highly-competitive process known as “winning the Buy Box”).
What Can Be Done About Fake Product Reviews?
Perhaps surprisingly, there is Federal Law that could be used to curb the rampant use of fake reviews. Specifically, pursuant to 15 U.S. Code § 45, the Federal Trade Commission (“FTC”) has authority to stop and penalize anyone “using unfair or deceptive acts or practices in or affecting commerce.” Notwithstanding this authority, very little enforcement is ever carried out by federal agents.
That leaves enforcement efforts largely up to private industry. Fortunately, private eCommerce Enforcement firms have developed methods to keep online product reviews in check. Their tactics include things like:
- 24/7 monitoring and analysis of all reviews of a client’s products that are sold online;
- 24/7 monitoring of all reviews associated with a TPR who is selling a client’s product below the manufacturer’s minimum advertised pricing (“MAP”) -- this is often an indication that the seller has obtained the product in an illegitimate manner that allows for unrealistically low prices;
- And 24/7 monitoring and analysis of reviews of sellers who are controlling the Buy Box for a particular product; and
- Invocation of federal laws, rules, and regulations (including trademark laws) to put a stop to illegitimate sellers generating poor reviews.
In truth, many brands are finding quicker and greater success by employing these private eCommerce Enforcement experts than they ever had while waiting for Federal Agencies like the FTC to take action. In part, this is because the private eCommerce Enforcers are highly specialized, laser-focused in their mission, and have set up proprietary processes to put an end to online shenanigans like fake product reviews expeditiously.
As for consumers -- well, for the time being, they might consider going back to personal recommendations when deciding which products to purchase. They can also take their time to write legitimate product reviews for anything they purchase online. And, they can always research professional reviews given by organizations like Consumer Reports. For the time, being, however, online reviews should perhaps be treated simply as “fake news.”