What should retailers do when brands post fake reviews?

Discussion
Source: sephora.com
Oct 22, 2019
George Anderson

What are retailers to do when they find brand partners are looking to tilt the selling scale in their favor by posting fake positive reviews of their own products online?

Last year, a person claiming to be a former employee of Sunday Riley, a skincare brand sold by Sephora, posted a link on Reddit to a copy of what appeared to be an internal company email. The message, which pointed to the rollout of two products, asked employees to “write at least three reviews” promoting the items. Employees were also instructed to answer negative reviews from consumers with positive ones. “The power of reviews is mighty,” the email read, “people look to what others are saying to persuade them and answer potential questions they may have.” 

When the news first broke that Sunday Riley employees were engaged in writing fake reviews and that the company had acquired a fake VPN account to prevent detection by Sephora, the retailer responded with a statement that it had teams in place to safeguard the customer review process and that it had been in communication with the vendor that had since committed to following the rules.

Sunday Riley, Allure reported, admitted to the fake reviews at the time the news became public through Reddit, although management claimed it had done so for a variety of reasons including to combat competitive brands that posted “negative reviews of products to swing opinion.”

Earlier this week, the Federal Trade Commission issued a press release that it had reached a settlement with Sunday Riley (the company and its founder and CEO) over two charges: “1) making false or misleading claims that the fake reviews reflected the opinions of ordinary users of the products; and 2) deceptively failing to disclose that the reviews were written by Ms. Riley or her employees.” 

While the settlement did not require Sunday Riley to admit any wrongdoing, it did include a commitment to not engage in similar activities in the future.

Two of the five FTC commissioners — Rohit Chopra and Rebecca Kelly Slaughter — disagreed with the “no fault settlement” and issued their own statement.

“Consider the cost-benefit analysis that a firm might undertake in considering whether to engage in review fraud. The potential benefits are substantial: higher ratings, more buzz, better positioning relative to competitors, and higher sales. The direct costs of generating reviews are minimal, certainly far less expensive than traditional advertising,” wrote the commissioners. “The biggest potential cost is if the wrongdoer is caught, but it is likely that the vast majority of fake review fraud goes undetected. Even fake reviews that are detected may simply be removed with no sanction against the creator.” 

DISCUSSION QUESTIONS: What should retailers do when they find a brand they sell has posted fake reviews? Do you think the FTC’s settlement with Sunday Riley is more likely to encourage or discourage brands thinking about posting false reviews online?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I do see the opportunity for a revised metric or evolved review format on the horizon. We'll see how long shoppers put up with the uncertainty."
"Review-based purchasing, like macro-influencer marketing, is on its way out due to inauthenticity. This is why I still subscribe to Consumer Reports."
"Retailers can avoid backlash over fake reviews by positioning themselves as a platform and not a publisher — as the agent of the customer and not the brand."

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21 Comments on "What should retailers do when brands post fake reviews?"


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Paula Rosenblum
BrainTrust

It is very hard to find trusted reviews online anymore. Many sites just exist to get referral fees from Amazon, it seems.

I’m getting to a point where I don’t trust them until I see more than 1,000. Then maybe we have a quorum.

Heidi Sax
BrainTrust

Although product reviews still hold some sway, consumers increasingly do (or should) take product reviews with a grain of salt. And retailers have too much on their plate to spend time spotting and policing vendors for fake reviews.

What Sunday Riley did was unethical, but the takeaway for brands will be “don’t document fake reviews in internal emails.” This will still occur –just under the hood next time.

Ken Lonyai
BrainTrust

1,000 reviews doesn’t validate anything. There is a car dealership in New Jersey that has something like 50ish Yelp reviews resulting in about 2.5 stars. In Google reviews, there are around 1,000+ mostly five star, mostly naming two salespeople as wonderful, and all of those are posted by “reviewers” with no other reviews.

Just last week, I looked for a special charging cable on Amazon and found at least half a dozen with 1,000+ five star reviews. Browsing the included reviews, they were for everything but the cable, including I believe, a washing machine.

Simply put: Google, Amazon, and others are disinterested in solving this problem despite claims and abilities otherwise.

Brad Johnson
Guest
30 days 13 hours ago

One-thousand isn’t enough to guarantee validity. I’ve run across products on Amazon that have 20,000 reviews, but when I checked on sites like ReviewMeta or FakeSpot, only about 60 percent of them were real (bringing the nearly five star rating down to three stars). Most sites do nothing at all and leave it up to the consumer. If a site could boast 90 percent accuracy of reviews then they would definitely have an advantage over everyone else.

Craig Sundstrom
Guest

Ditto Brad: when I see a restaurant/other business open only a year or two with 10x as many reviews as others open for decades, I’m suspicious; it could of course mean it’s just trendy, but either way it’s a red flag.

Ralph Jacobson
BrainTrust

I agree with Paula Rosenblum that shoppers are wary of review trustworthiness, especially if the quantity of reviews is low. Too many ulterior motives exist for literally anyone to write reviews today. I do see the opportunity for a revised metric or evolved review format on the horizon. We’ll see how long shoppers put up with the uncertainty. For now, retailers must add in their own commentary, for shoppers to see, which addresses review data stewardship.

Bob Amster
BrainTrust

All this is good but it doesn’t answer the question of, what should the retailer do? Retailers have options: stop buying the product, issue stern warnings to suppliers, or hope that the fake (positive) reviews bring in more customers and smile all the way to the bank (which is not the ethical solution).

Ryan Mathews
BrainTrust

In the current climate of little or no regulatory enforcement, the FTC’s settlement in the Sunday Riley case isn’t likely to discourage anyone from engaging in false reviewing. Whether or not it will, in fact, encourage more such behavior remains to be seen. The problem with any digital communication — reviews, posts, blogs, etc. — is that their veracity is fairly difficult to establish, unless you are doggedly pursuing fraud and even then it isn’t easy. Just ask Facebook. So retailers seem to have little recourse other than to continue to make their detection systems more and more sophisticated or — even more simply — to make any detection of fraud on a brander’s part cause for a revocation of contract or a punitive payment. Will that stop everyone? Of course not, but it might help a bit.

Michael Terpkosh
BrainTrust

A retailer must have a strong written policy outlining the business relationship between the retailer and the supplier. Call this a partnership agreement, corporate policy statement or whatever you like. This written policy must clearly state the actions a retailer will take if their supplier partner fails to live up to their side of the partnership and creates distrust. This should include steps to reduce the supplier’s ability to work in partnership with the retailer up to and including removal of the product from the retailer. Regardless of the FTC ruling, the creation and maintenance of trust in a business relationship is between the retailer and the supplier.

Brandon Rael
BrainTrust

In the immortal words of my very wise 8-year-old daughter, “I don’t trust product reviews. I don’t know these people, and I don’t even know if they are real.” She does have a very valid point, and we put so much credence in the idea that these reviews are actually real, authentic, and represent a broad spectrum of customers.

In all seriousness, Amazon’s review-driven format has changed how we engage with brands during the discovery or showrooming phase. While, 89 percent of all shopping transactions still take place in the store, customers are increasingly dependent on online product reviews to narrow down their selections. But how could we have any confidence in the reviews, as there simply are no pressures for the FTC to regulate things?

Yet in chaos there is an opportunity, as brands could leverage Instagram influencers to promote their products. If product reviews have become the new “fake news” customers will seek inspiration elsewhere.

Camille P. Schuster, PhD.
BrainTrust

In this era of desired transparency and little enforcement, consumers need to be wary of reviews. This situation sets the stage for and reinforces consumer skepticism. If the retailer allows fake reviews to remain on their website, the skepticism is toward the brand and the retailer. Retailers have options for how to respond: 1.) do nothing and accept the consumer response, 2.) tag reviews as coming from the brand, 3.) identify reviews that have been verified by consumers, 4.) take fake reviews down, 5) penalize the brand. Of course monitoring reviews takes time and identifying fake reviews is difficult. What is a retailer’s reputation worth?

Evan Snively
BrainTrust

I don’t think the FTC’s decision is going to tip the scales one way or the other for a brand. It will cause some brands to reign in and sharpen the elusiveness of their practices, but it’s doubtful that it will cause anyone to stop (outside of maybe some brands that are direct competitors in Sunday Riley’s space).

Dr. Stephen Needel
BrainTrust

If authenticity/trust is the big thing everyone says it is, how do retailers do less than discontinue the brand and make it clear why they are discontinuing it?

Liz Adamson
BrainTrust

The FTC’s settlement is little more than a slap on the wrist, it has no teeth to discourage Sunday Riley or other brands from engaging in the practice of writing fake reviews. Customers are becoming more and more aware that this is an issue and unless retailers and online marketplaces get more serious about penalizing brands who engage in this practice, reviews will become meaningless.

Scott Benedict
Guest

I believe — strongly — in a “hard line” approach to this topic. Consumers must be able to have faith that reviews on your site, or for your brand, are an accurate depiction of true consumer sentiment. As such, it is necessary to put in place processes to confirm the accuracy of reviews (that they were provided by consumers not by others) and the removal and penalties for inaccurate reviews should be swift and painful for those that engage in deceptive behavior — up to and including dropping them from your assortment.

Jasmine Glasheen
BrainTrust

Sounds to me like the FTC nearly encourages fake reviews, based on how they handled the Sunday Riley case. Then we have Amazon sellers flat out offering to ship customers free product for positive write-ups.

Review-based purchasing, like macro-influencer marketing, is on its way out due to inauthenticity. This is why I still subscribe to Consumer Reports.

Jeff Sward
BrainTrust

Well said. I referred to Consumer Reports in a comment yesterday, trying to make the point about the authenticity of Amazon’s “curation” process. Something is wrong if we have to refer to a decades old print medium as a bedrock of genuine and authentic objectivity. Paid influencing, bought-and-paid-for opinions, outright fabrications will lie themselves out of a reason for being.

John Hyman
Guest
30 days 12 hours ago

The operative word here is “fraud” and I am reminded that every good marketing tactic that has ever been devised ends up getting effed-up by greedy and unscrupulous marketers and business people. In this instance, were I the decision maker at the retailer, I’d try to identify and remove any and all fake reviews. If a vendor is found to be complicit in posting them, then the power of the charge-back should curb that behavior. But in typical FTC form, the ruling offers no teeth and will only serve to encourage such activities.

Ananda Chakravarty
BrainTrust

The retailer choices are plenty, but most retailers don’t intend to closely monitor reviews. It’s an added cost and a hassle to monitor.

The FTC has taken stronger actions in the past, and their job is to enable fair practices when it comes to trade. In one similar example this year, the FTC fined a company $12.8MM with a reprieve based on certain qualifying events. However this is relatively new for the FTC. The retailers themselves are in the best position to outline policies when partnering including delineating what is an acceptable review. There are review tools that allow for confirmed purchases and identify potential fraud. Retailers can take advantage of these.

Most consumers are trusting reviews less than before and the reviews are not the only decision making tool. For the retailer, it’s table stakes to have reviews, but active monitoring isn’t usually impactful enough for the retailer to concentrate on it.

William Hogben
BrainTrust

Retailers can avoid backlash over fake reviews by positioning themselves as a platform and not a publisher — as the agent of the customer and not the brand. The reviews section is a free for all, as long as the retailer is not amplifying fake reviews or otherwise tilting the scales, bad behavior by other reviewers isn’t going to come back to them. Particularly concerned retailers can add a “report this review” option to make it really clear to the consumer that they’re not endorsing the content or engaging in deceptive practices.

Craig Sundstrom
Guest

Curiously, the daily poll didn’t offer “no effect” as a choice. I’ve not much to say about fake reviews — or even “legitimate” reviews by incompetent people — except perhaps the old standby “caveat emptor.” (Sadly even here on RW, we see the influence of this type of strategized deception where politically charged topics routinely draw absurd numbers of down votes).

wpDiscuz
Braintrust
"I do see the opportunity for a revised metric or evolved review format on the horizon. We'll see how long shoppers put up with the uncertainty."
"Review-based purchasing, like macro-influencer marketing, is on its way out due to inauthenticity. This is why I still subscribe to Consumer Reports."
"Retailers can avoid backlash over fake reviews by positioning themselves as a platform and not a publisher — as the agent of the customer and not the brand."

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