What’s fair vs. foul in managing negative reviews?
Fashion Nova last week was ordered to pay $4.2 million to settle allegations that it concealed unfavorable reviews on its website.
According to the complaint from the Federal Trade Commission (FTC), the fast-fashion site, known for its collaboration with artists Cardi B and Megan Thee Stallion, used a third-party review management tool that allowed four- and five-star reviews to automatically post on its site while requiring approval for lower-starred reviews.
The FTC said that from late 2015 until November 2019, hundreds of thousands of lower-starred reviews were never approved or posted. The case is the FTC’s first involving a company’s efforts to conceal negative customer reviews.
“Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement. “Fashion Nova is being held accountable for these practices, and other firms should take note.”
Fashion Nova denied any wrongdoing.
The FTC said it has also sent letters to 10 other unnamed companies about possible deceptive online review practices and issued new guidance for online retailers and review platforms. Beyond warning against writing or procuring fake reviews, the FTC advises against not fully disclosing if there is an incentive behind the review, soliciting review submissions from likely only positive reviewers and treating negative reviews with greater scrutiny.
The internet is full of stories of consumers being offered refunds, gift cards and cash to delete negative reviews.
A Wall Street Journal article last year detailed how some customers were being offered double the value of their refund to delete a negative review. Third-party sellers are allowed to contract buyers through Amazon’s internal messaging service, although third-party software that matches customers’ shipping information enables some sellers to attain customer email addresses.
The FTC’s updated guidance also includes a warning against using reputation management firms that promise to improve customer reviews and ratings. The FTC wrote, “Make sure you understand what they are doing. You can be held responsible for what they do on your behalf.”
- Fashion Nova will Pay $4.2 Million as part of Settlement of FTC Allegations it Blocked Negative Reviews of Products – Federal Trade Commission
- When Amazon Customers Leave Negative Reviews, Some Sellers Hunt Them Down – The Wall Street Journal
- Soliciting And Paying For Online Reviews: A Guide For Marketers – Federal Trade Commission
- Abracadabra: Bad reviews be gone – Federal Trade Commission
DISCUSSION QUESTIONS: What do you think is fair play versus crossing the line setting policies for reducing negative online reviews? Is it legitimate or shady to offer a refund to encourage a customer to remove a negative review or change it to a positive one?