Fake Reviews: Achilles Heel of eCommerce Growth Story

by Neethu John February 15, 2023 3 mins read

Seeing is believing, or is it? In this digital age, seeing is a relative term as what you see on your screen (or read) may be far removed from reality. Customers buying online products after checking reviews will easily reckon with this.

To begin with, let’s agree that most customers buy online products that receive great positive reviews by other customers. In fact, a 2013 European Consumer Centres' Network web survey revealed that 82% of online buyers check consumer reviews before buying products online. Online reviews are also crucial for building a business and maintaining a good reputation. However, a significant chunk of these reviews could be counterfeit, posted by those who are paid for it or by malicious users and bots. Sadly this menace is badly affecting eCommerce validity and revenue, as fake reviews would make users distrust other reviews or even lead them to distrust the platform itself.

According to different studies conducted in the past few years, fake reviews comprise 1- 16 % of all consumer reviews. Though eCommerce platforms have frameworks to monitor fake reviews, many have admitted that they find it challenging to deal with the paid, unverifiable reviews which make it difficult for consumers to recognise genuine reviews.

The true picture

According to self-reporting by eCommerce giants like Trip Advisor, Yelp, TrustPilot and Amazon, nearly four percent of all online reviews are forged. In other words, fake online reviews directly influence global online spending of a whopping $152 billion, which includes $791 billion of e-commerce spending annually in the US, $6.4 billion in Japan, $5 billion in the UK, $2.3 billion in Canada and $900 million in Australia. (Ref 1)

More recently, a 2021 study by Australia’s competition watchdog, Australian Competition and Consumer Commission (ACCC), showed that fake reviews fuelled $1.2 billion worth of eCommerce sales in Australia in 2021 while online reviews influenced $3.8 trillion of global eCommerce spend during that year (Ref 3). Again on 20 January 2022, The European Commission reported that, in 144 out of the 223 websites checked, authorities could not confirm whether the reviews were actually posted by consumers that had used the product or service. The authorities concluded that at least 55% of the checked websites violate the EU’s Unfair Commercial Practices Directive which requires that truthful information is presented to consumers to allow an informed choice. (Ref 4)

Why are fake reviews difficult to deal with?

The primary reason is that fake reviews can be highly profitable. An added star on a restaurant's Yelp rating may increase profit up to ten percent. Notably, in an enforcement case against Legacy Learning Systems Inc. it was found that $250,000 outlay on fake reviews generated more than $5 million in sales. (Ref 5)

Moreover, fake reviews also creates considerable short-term boost in organic search positions and sales ranks, which may last for as long as four weeks, even post deletion or detection. What makes the matter worse is the fact that only an automated operation can generate unlimited fake reviews across the eCommerce landscape. One doesn’t even need programming skills to do this!

Subsequent elimination of fake reviews happens after nearly 100 days. This gives the fraudsters time to make profits and hence the economic benefits often outshine the risks. This acts as an incentive for the schemers. Available reports confirm that online private groups exist who persuade users to buy certain products and put a five-star review for a full refund or at times even for a commission of 5-10 dollars. (Ref 6)

Measures taken by leading eCommerce platforms

eCommerce giants like Amazon and Flipkart have taken serious efforts to address the issue of fake reviews. The platforms have adopted AI and ML enabled tools to boost the verified reviews and those that are deemed helpful by others.

Amazon bars sellers off its marketplace if they break rules and employs resources to remove fake reviews as well as accounts that post them. Notably, the platform blocked 200 million suspected fake reviews before they were posted in 2020. (Ref 8) However, the sheer size of their customers makes it difficult for them to weed out all the dubious reviews. According to Britain's competition watchdog, Competition Markets Authority (CMA), Facebook removed 188 pages and groups and disabled 24 accounts that were involved in the fake review trade, some on its Instagram platform in 2020.

Way forward

At a time when COVID-19 pandemic has led to an unprecedented growth in eCommerce sales, the marketplace is hit by bad actors with easy access to fake reviews leading to consumer loss. Against this reality, it has now become imperative for eCommerce players to act against fake online reviews. The primary target for all eCommerce platforms will be to understand where the risks are and act immediately to mitigate them. The smartest thing will be to get ahead and stop the reviews by actively filtering out the bad actors and the bots. Procrastinating may aggravate the situation, as new technology will introduce new and advanced bots.

Remember, malicious traffic is everywhere, but there are tools to mitigate the risks. If you are a small and medium eCommerce enterprise, partner with Mozanta, a proven platform that brings in deep industry know-how, to address all eCommerce challenges. As an innovation-driven digital consulting house focused on delivering smart, insightful and pioneering eCommerce solutions, Mozanta has been building high-quality software tools to meet eCommerce business needs for nearly a decade.

Act now!


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