Did you know that displaying consumer reviews on your product page can increase sales by 270%? What’s more, a whopping 97% of online shoppers depend on online reviews to guide their buying decisions. With that said, the role of online reviews in influencing purchases can’t be underplayed.

Unfortunately, some corrupt players take advantage of this customer-dependence on online reviews to promote sales of their products. In many cases, they generate several fake reviews, which give buyers a false impression about their products.

Some of the most common ways business owners get fake reviews include the following:

  • Writing fake reviews on platforms such as Manta, Yellow Pages, and City Search.
  • Hiring experienced fake reviews writers on Upwork, Fiverr, Freelancer, or other websites for sourcing writing talents.

More than before, online shoppers can quickly spot fake reviews, but the impact is still glaring in the e-commerce space. According to Local Circle’s poll, 56% of consumers said that they don’t trust product reviews on e-commerce websites. In the same survey, 65% said they don’t trust product star ratings on e-commerce websites.

Despite the high percentage of shoppers who can spot fake online reviews, many people buy products that they are eventually not pleased with. When that happens, buyers may feel cheated and disappointed in many ways.

To understand the extent of the damage fake online reviews have caused to the e-commerce sphere, we explored 5 ways customers are being negatively affected by them.

1. Consumers waste money

UK’s Competition and Markets Authority (CMA), a government department responsible for promoting and controlling business competition within the UK, estimated that fake reviews influence about £23 billion (or US$28 billion) of consumers’ yearly spending.

According to the CMA, millions of shoppers in the UK rely on reviews when looking for an ideal product or service online. But with so many fake reviews flooding e-commerce platforms, most people buy products they actually don’t want, accumulating billions of British Pounds wasted every year.

In a study done by TrustPilot, a platform where consumers can write and read reviews about businesses, consumers waste approximately $25 billion in the US by buying products over-hyped due to fake reviews. The effect on consumer spending is a growing cause for concern, and relevant organizations are starting to intervene.

On BBC News, the UK's CMA said it would examine whether online stores were doing enough to protect consumers who shop online during lockdown. The organization warned it would take action against e-commerce sites that disobey its 2008 Consumer Protection law.

CMA’s chief executive, Andrea Cosceli, said, “During lockdown, we're more dependent on online shopping, so it's vital that we only read online reviews with genuine opinions.” He also added, “if a consumer is persuaded to buy a counterfeit product or service after reading a fake or misleading review, they may end up wasting money.”

2. Fake reviews cause poor consumer experience

Many sellers are flooding online marketplaces such as Amazon, eBay, and Walmart, mainly because more people are engaging in online services and products. The COVID-19 pandemic fostered engagement with online sellers because of the lockdown and social distancing policy in many countries.

However, with the growing number of fake reviews that sellers generate to persuade buyers to continually make misinformed purchasing decisions, consumers are more dissatisfied.

In July, this year, two prominent institutions, the University of California, Los Angeles (UCLA), known for medicine, performing arts, athletics, and addressing pressing societal needs, and the University of Southern California (USC), a private research institution, conducted a study and found the following shocking discoveries within the study period:

  • More than 20 Facebook groups were created for sponsoring fake reviews, which is a much smaller number than the several hundreds of Facebook groups we detected in our own research.
  • Each of the groups had, on average, 16,000 unique members or bots.
  • Sellers posted about 560 requests for product reviews per day, promising a complete refund for interested reviewers.

(Note: the data from this study were hand-picked and may not precisely reflect the total number of Facebook groups created for sponsoring fake reviews).

The rising number of fake online reviews, especially during the lockdown, makes customers buy subpar products.

To curtail this development, online marketplaces like Amazon, Walmart, eBay, AliExpress, and others have put policies in place to detect and take measures against brands sponsoring fake reviews. However, while companies are dealing with fake reviews, many unsuspecting buyers would have been misled to buy the wrong products.

In some cases, buyers may return the products if they had a bad experience using it, but some may abandon the brand altogether. A report showed that shoppers return at least 30% of online products for reasons which may include the following:

  • Faults in the product.
  • General a lower quality product than portrayed.
  • Differences between what shoppers ordered and the actual product.
  • Shoppers receiving the wrong item.

3. Consumers may become wary of buying products online

Although an increasing 90% of consumers looked for products and services online in 2019 compared to only 70% in 2010 according to BrightLocal’s article, many people are careful about buying products online.

Consumers are becoming more alert about reviews they read online, and many believe fake reviews are becoming a norm in the e-commerce industry. Because of the rapid growth of fake reviews online, most shoppers are growing skeptical about online products. For instance, 54% of consumers would avoid a product if they suspect it has fake reviews.

4. They lose trust in brands and abandon them

When customers push themselves to make a buying decision despite their suspicion, they may feel betrayed by the brand if they get disappointed by using the product or service.

Justin Malbon’s publication on Researchgate extensively showcased that fake reviews can affect brands’ reputations. Some recognized brands indulge in the temptation to sponsor fake reviews on their platforms, so they can convert more sales. However, is having more conversions really the case?

In brief, Malbon’s article emphasizes policymakers and regulators’ need to take fake reviews seriously because they weaken efficient mechanisms for bridging the information gap between online sellers and buyers. It also suggests that adding an “alliance approach” to existing regulatory systems can help increase the effectiveness of regulatory oversight.

A study showed an 11% decline in most of the adult population’s (18-65 years) trust for online reviews, mainly because they think a collection of flawless 5-star reviews are not credible. The same study highlighted that 62% of consumers will stop using brands they know are censoring reviews.

5. It increases brand report rate to the FTC

A report by Sift, an organization that promotes digital trust and safety, showed that 70% of online shoppers trust product or service reviews more than a star or numerical rating. But unfortunately, 85% of them believe that most online reviews are fake or fraudulent.

Because of the surge in online shopping during the COVID-19 pandemic, according to the Federal Trade Commission (FTC)’s latest Consumer Protection Data Spotlight, the agency said it received more than 34,000 complaints from online shoppers between April and May 2020.

Most cheated online shoppers report reviews they suspect are fake. Thankfully, some shopping platforms suspend, ban, or take legal action against companies that support fake reviews for their products and services.

Amazon, for example, has clear policies for both reviewers and selling partners that prohibit the abuse of its community features. For example, Amazon declared that it would instantly terminate or suspend sellers’ privileges, delist related products, and remove reviews for sellers who attempt to manipulate reviews or violate its guidelines.

The company also stated that it might withhold or forfeit remittances and payments if it discovers that an Amazon account was used to foster review manipulation.

To cut down on fake reviews, the FTC also requires reviewers to disclose payment received for the products they review, though they don’t have to indicate the exact amount. Besides, if they are reviewing a product they didn’t buy for themselves, reviewers must show that they received the products for free.

On a Final Note

Fake reviews are a threat to the growing e-commerce industry, with consumers being affected the most in terms of money, time, and satisfaction. Brands are also not left out, mainly because they may lose the trust of their loyal consumers and possibly take a hit. In any case, both parties, with the help of relevant authorities, have a duty to ensure that the e-commerce space is always a safe place to shop.

References

  • 1. LinkedIn; The Power of Online Reviews to Boost Sales; https://business.linkedin.com/marketing-solutions/blog/b2b-beat/2017/the-power-of-online-reviews-to-boost-sales#:~:text=Displaying%20reviews%20can%20boost%20conversions,rates%20soar%20after%20adding%20reviews
  • 2. Power Reviews; New Data: 97% of Consumers Depend on Reviews for Purchase Decision; https://www.powerreviews.com/events/consumers-depend-on-reviews/
  • 3. Planet Marketing; How to get Fake Business Reviews; https://planetmarketing.com/blog/how-to-get-fake-business-reviews/
  • 4. Local Circles; 34% consumers say their low product ratings have not been published by eCommerce sites; https://www.localcircles.com/a/press/page/fake-product-review-ratings-on-ecommerce-sites-survey#.X5gZ9ohKhdh
  • 5. Competition and Markets Authority, CMA; Online Reviews and Endorsement - Report on the CMA’s call for information; https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/436238/Online_reviews_and_endorsements.pdf
  • 6. Trust Pilot; The critical role of reviews in Internet trust; https://business.trustpilot.com/guides-reports/build-trusted-brand/the-critical-role-of-reviews-in-internet-trust
  • 7. British Broadcasting Corporation, BBC; Fake online reviews under investigation by competition authority; https://www.bbc.com/news/technology-52771913
  • 8. Big Commerce; Understanding the COVID-19 Effect on Online Shopping Behavior; https://www.bigcommerce.com/blog/covid-19-ecommerce/
  • 9. CNBC; Amazon is filled with fake reviews and it’s getting harder to spot them; https://www.cnbc.com/2020/09/06/amazon-reviews-thousands-are-fake-heres-how-to-spot-them.html
  • 10. Invesp; E-commerce Product Return Rate – Statistics and Trends [Infographic]; https://www.invespcro.com/blog/ecommerce-product-return-rate-statistics/
  • 11. Bright Local; Fake Reviews Are a Real Problem: 8 Statistics That Show Why; https://www.brightlocal.com/learn/fake-reviews-are-a-real-problem-8-statistics-that-show-why/
  • 12. Research Gate; Malbon, J.; Taking Fake Online Consumer Reviews Seriously; https://www.researchgate.net/publication/256054379_Taking_Fake_Online_Consumer_Reviews_Seriously
  • 13. Impact; Consumers are wasting money online due to fake reviews [Study]; https://www.impactbnd.com/blog/consumers-could-be-wasting-money-due-to-fake-reviews-study
  • 14. Sift; Fake Reviews: A Growing Fraud Concern Affecting Brand Loyalty and Growth; https://pages.sift.com/rs/526-PCC-974/images/ebook-fake-reviews-affect-brand-loyalty-and-growth.pdf
  • 15. Federal Trade Commission, FTC; FTC Data Shows Record Surge in Online Shopping Complaints During Pandemic; https://www.ftc.gov/news-events/press-releases/2020/07/ftc-data-shows-record-surge-online-shopping-complaints-during
  • 16. YourMoney.com; Fake reviews misleading customers; https://www.yourmoney.com/household-bills/fake-reviews-misleading-customers/
  • 17. Amazon; Anti-Manipulation Policy for Customer Reviews; https://www.amazon.com/gp/help/customer/display.html?nodeId=201996120#:~:text=Customers%20trust%20that%20they%20can,inauthentic%20content%2C%20is%20strictly%20prohibited

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