Do you rely on Yelp to decide whether to try someplace new? Or, do you not trust Yelp reviewers? If you see red flags while perusing Yelp reviews, you are not alone.
According to a recent report written by Michael Luca, assistant professor at Harvard Business School, and Georgios Zervas, an assistant professor of marketing at Boston University, up to 20% of all Yelp reviews are fake; this figure is up from 5% in 2006. This is especially problematic in light of an earlier study by Luca: after crunching Washington State Department of Revenue restaurant data, he found that a one-star rating hike on Yelp can mean a 5% to 9% rise in restaurant revenue.
Fraudulent Yelp activity recently had a very real impact on a friend of mine and her family’s new business. When they opened their new restaurant last year, on the heels of the success they had with their first restaurant, they were surprised by numerous poor Yelp reviews. The reviews were especially surprising because the restaurant “actually got one star reviews before the doors even opened” and some of those reviews even “reviewed the crust of the pizza,” saying “it was thick and soggy.” While Yelp, after being contacted by the family, eventually took down the fraudulent reviews, those few harsh reviews were especially tough on a new business that “need[s] the word of mouth” to kick-start its customer base.
In advertising for freelancers to post fake reviews, some companies posted listings on Craigslist calling for, for example, “someone who is a YELP expert to post positive reviews for a spa that will not be filtered using legitimate existing yelp accounts,” and who has “at least 10 friends on Yelp.”
Yelp defrauders’ luck is changing, though. New York Attorney General Eric T. Schneiderman recently announced a bust of 19 companies posting fraudulent reviews on Yelp, part of a year-long operation termed “Operation Clean Turf.” Following the bust, these companies were fined between $2,500–$10,000 each. The operation found that some of the companies, perhaps in an effort to cover their tracks, even “went on review sites that criticized their own fake-review operations and [wrote] fake reviews denying they wrote fake reviews.”
Yelp itself is also getting in on the action, even if its intentions may not always be purely consumer-oriented. For example, a California lawyer sued Yelp alleging that it had under-delivered on advertisements he had purchased. After the judge ruled in the lawyer’s favor, Yelp countersued, charging that the lawyer left fraudulent reviews on his own law firm’s Yelp page.
For now, it is probably best to feel healthy skepticism when you are reading internet reviews at sites such as Yelp or Amazon. But hold out hope—continuing legal action like that taken by the New York Attorney General may be a successful deterrent to those considering fraudulent postings in the future.