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The Federal Trade Commission (FTC) recently implemented guidance that reviewers must fully disclose any incentives they receive in exchange for reviews. A new study finds the guidance doesn’t go far enough.
The study, from University of Florida and University of South Carolina researchers, shows that when people received free products in exchange for reviews, their ratings were significantly inflated — and product sales were stronger — even though reviewers disclosed that they received the product for free.
The research was based on thousands of reviews posted on Amazon before and after October 2016, when the platform stopped working directly with reviewers to offer free products in exchange for a review.
Incentivized reviewers were found to rate identical products nearly 0.5 stars higher on average on a five-star scale. Researchers found that many reviewers felt compelled to post “overwhelmingly positive reviews” so the retailer continued to hire them.
Amazon’s removal of incentivized reviews on the same products led to a significant sales reduction, but customer satisfaction increased, marked by a smaller number of one-star reviews.
Researchers also found that marketplace-led review programs — such as Amazon Vine, in which Amazon selects reviewers rather than the seller — support more unbiased reviews.
Woochoel Shin, a University of Florida business professor, said, “If you’re Amazon, you’re not interested in inflating the rating of one specific seller. Amazon has an incentive to keep the marketplace fair, but they also want to provide information to consumers. Reviewers, knowing that the party that hired them does not want to inflate the rating, offer fairer reviews.”
The researchers noted that incentivized reviews remain common online, including on sites such as Walmart, Yelp, and Overstock. They also note how influencers routinely hype products in paid reviews on Instagram and YouTube.
Encouraging reviews is often recommended for businesses seeking to offset the challenges of removing negative fake reviews from a competitor or disgruntled ex-employee.
BrightLocal’s Local Consumer Review Survey 2023 found that despite platforms such as Yelp and Google also moving toward stricter policies against solicitation in reviews, offering discounts or cash in exchange for reviews saw a rebound in 2022. When asked which ways survey responders have been incentivized to leave a review by a local business in the last 12 months, the top responses were in exchange for a discount (26%), for a gift or service (18%), and for entry into a competition or prize draw (17%).