Lessons for Retailers Following the Latest Amazon Lawsuits

Following two similar lawsuits filed last year, Amazon.com is yet again making moves to fight fake reviews. In April, Amazon went after five websites selling positive product reviews to the online retailer's sellers. And then, earlier this month, Amazon filed yet another suit, this time targeting the sellers buying fake reviews for the products they sell on Amazon. This is Amazon’s fourth major crackdown against fake reviews, hardly the first investigation focused on this topic.

Most brands and retailers understand how impactful the presence of ratings and reviews can be, but that benefit is only realized if the reviews are real and authentic. Companies must avoid the temptation of paying for fake positive reviews, as they have the potential to tarnish trust and cause a brand’s overall credibility to take a serious hit.

Here are three valuable lessons brands and retailers can learn in light of Amazon’s ongoing crackdown on fake reviews.

Spot Fake Reviews
Amazon has clearly taken note of the negative impact fake reviews have on its business, and other brands and retailers are following suit by working to eliminate fake reviews. If your brand works with a ratings and reviews provider, the first step is to ask what measures it has in place to ensure review content is authentic and fraud free. For example, some review providers screen reviews via fraud prevention technology and even pass each review through a team of human moderators. While fraudulent reviews are flagged, the actual review content is never altered, allowing the customer’s true voice to shine through.

Highlight Reviews From Verified Buyers
The Amazon lawsuit is a reminder for retailers to take stock of their current online review offerings and encourage authentic reviews from actual customers. One way to show customers you value authentic reviews is to indicate which reviews are written by verified buyers. Check with your ratings and reviews provider to see if reviews written as a result of a post-purchase email or using a unique code on a receipt can include a “Verified Buyer” sticker or badge. In addition, ask your ratings and reviews provider if it allows you to indicate if a reviewer received a free sample or sweepstakes entry in exchange for writing a review. Doing so helps future customers get a better understanding of who wrote that review, so they have all the information they need to make an informed purchase decision.

Embrace Negative Reviews
Most review websites named in recent Amazon lawsuits solicit positive and, in many cases, perfect (i.e., five-star) reviews. However, according to recent data from PowerReviews and Northwestern University, perfect ratings are often perceived as too good to be true, meaning an abundance of five-star ratings doesn't necessarily have a positive impact on revenue. The data found consumers are most likely to buy products with an average star rating between 4.2 and 4.5 stars. While consumers obviously want to purchase products with positive ratings, allowing negative reviews to be displayed helps retailers and brands build trust with customers.

Authentic customer reviews, including negative ones, are important to display on your website. Positive reviews reinforce what shoppers love about your products, while negative reviews can provide rich insights to help you improve your products and the customer experience. By cracking down on fake reviews and ensuring you only display authentic ones, you can become a more trusted brand, which has the potential to increase your revenue and build long-term customer loyalty.

Matt Parsons is the chief customer officer at PowerReviews, a software company that helps more than 1,000 brands and retailers collect, display and syndicate customer reviews.