Those glowing online reviews may not always be what they seem.
A study from George Mason University suggests that businesses that use fake positive reviews can damage their reputation and lose consumer trust.
The research examined Yelp's practice of placing a prominent "Consumer Alert" banner on the listing pages of businesses suspected of manipulating reviews. The warning typically remains in place for about 90 days.
“We don’t know every signal Yelp uses to identify fake or paid-for reviews, but from what we know, Yelp relies substantially on reports from consumers and business owners,” said Yi Cao, assistant professor of accounting at the Costello College of Business at George Mason University. “There are also reports that Yelp uses an algorithm to screen reviews for AI-generated language, which can be a sign of review inflation.”
Researchers found that businesses flagged for review manipulation experienced reputational damage and lost customer trust.
The takeaway: Before making a purchase based on ratings on sites like Yelp or Amazon, look beyond the stars.
Consider how established the business or product is, and be cautious of reviews that seem overwhelmingly positive or appear in large numbers over a short period of time.
