By DAREN FONDA, Senior Associate Editor
From Kiplinger’s Personal Finance, July 2016
Yelp has long been accused of acting like the Tony Soprano of online reviews. Companies claim that Yelp favors advertisers by emphasizing their search results and reviews. Some businesses say Yelp has tried to persuade them to buy ads by offering to make negative reviews disappear — or tried to strong-arm them by threatening to delete positive comments. A few companies banded together in 2010 to sue the firm over such practices. And some Yelp shareholders have sued, too, claiming the company inflated its revenues by coercing businesses to advertise. More than 2,000 complaints about Yelp have also piled up at the Federal Trade Commission, which has scrutinized Yelp’s ad-sales tactics and “recommendation” software, used to highlight reviews deemed the most useful to consumers.
So far, Yelp has batted down all these claims. A federal judge dismissed the shareholder lawsuit last year, finding scant signs of “allegedly extortionate practices.” Judges also tossed the local-business lawsuit in 2014, writing that Yelp’s threats of “economic harm” were, “at most, hard bargaining.” The FTC decided last year to close its inquiry without taking any action. For its part, Yelp says it takes “many steps to prevent gaming of our system and to protect consumers and business owners alike.”
Yelp’s successes haven’t stymied its critics, though. On sites such as Yelp-sucks.com, business owners and consumers continue to rant about the firm. An upcoming documentary, Billion Dollar Bully, takes aim at Yelp’s tactics. On TV, Yelp’s hefty influence in the
Yelp’s practices sound to some like extortion
A merchant is told by Yelp that for a fee, troubling ads on the site can be made to go away. A Yelp spokesman says what was meant is that the merchant ‘could buy out the ad space on your own page.’
March 31, 2014|David Lazarus
Rick Fonger, an Alhambra jeweler, says Yelp told him that troubling ads… (Gary Friedman, Los Angeles…)
Yelp just can’t stop living the thug life.
Five years ago, I asked whether the popular review site was a shakedown racket for merchants. I quoted a number of small-business owners who said Yelp had threatened to run negative reviews more prominently if they didn’t pay for advertising.
Jeremy Stoppelman, Yelp’s chief executive, told me at the time that the San Francisco company doesn’t strong-arm merchants. He blamed talk of shakedowns on disgruntled business owners spreading “false rumors.”
I guess this is another one of those.
Rick Fonger, 62, decided a few years ago to end a career in journalism and move from Canada to Alhambra, where he opened a jewelry store.
“I’ve always been interested in gemstones and gemology,” he said. “It was just something I wanted to do.”
To give his shop, called 58 Facets Jewelry, a little social-media boost, Fonger spent about $300 a month advertising on Yelp. “It worked OK, not great,” he said.
After six months, he decided to shift his limited marketing budget to direct mail. He canceled his Yelp ad in February.
The very next day, Fonger said, a Yelp employee called to say she wanted to help. She pointed out that competitors’ ads were now appearing above the reviews for his store.
“She said that for $75 a month, she could make those ads go away,” Fonger recalled.
He responded that this sounded a lot like extortion.
“She said she could understand why I’d think that,” Fonger said. “But she said they do it to everyone.”
As if that makes it OK.
“It certainly sounds like extortion,” said Kevin Dean, president of WSI Net Advantage, a Fremont, Calif., Internet marketing firm.
“If Yelp just sold the ad space to someone else, fine,” he said. “But to then call up and offer to make the ad go away for a price, that seems like an unscrupulous business practice.”
I’ll pause here to say that I think Yelp is a flawed but valuable consumer tool. I take the reviews on the site with a grain of salt, but it’s a great place to get a quick pulse reading of people’s opinions about restaurants, stores or other businesses.
That said, Yelp is a for-profit business itself, and it makes the bulk of its money from neighborhood merchants. About 83% of the company’s nearly $71 million in revenue in the most recent quarter came from local ads.
This gives Yelp a powerful incentive to turn the screws on small businesses as much as it can.
Vince Sollitto, a Yelp spokesman, said that when the company’s rep told Fonger that she could make competitors’ ads go away for $75 a month, what she meant was that “you could buy out the ad space on your own page.”
He said Yelp is doing the same thing that phone books do: selling ads that accompany related business listings.
The difference, of course, is that the Yellow Pages never told businesses they could pay extra to get rid of someone else’s ad.
By offering this service, Yelp has introduced a more cutthroat approach to marketing, with itself as the broker for whose pitch is seen first by users of the site.
When I checked out the Yelp listing for Fonger’s shop, an ad for a rival jewelry store appeared near the top of the page, undermining the influence of the nine five-star reviews that had been posted by customers.
Sollitto said he was surprised that Fonger likened the company’s practices to extortion. He said Yelp is “all about connecting local businesses and consumers.”
I asked how offering businesses a chance to pay a monthly fee for erasing a rival’s ad was different from websites that post people’s mug shots from arrests and then charge a fee to take them down.
Sollitto seemed offended that I’d even make such a comparison.
“Yelp has created a platform for sharing information,” he said. “It’s a discovery engine for small businesses.”
And maybe he believes that. The reality, however, is that Yelp has created an online venue at which a merchant’s competitors can post negative reviews and run their own ads.
Yelp then makes money by charging to downplay others’ negative reviews and to keep rivals’ ads away.
You know the old chestnut about succeeding in business by finding a need and filling it? Yelp succeeds by making a problem and then taking people’s money to solve it.
This strikes me as an unfair business practice. But, so far, Yelp has weathered various lawsuits challenging its policies. “Their claims keep getting dismissed for lack of any fact-based evidence,” Sollitto wrote last year on Yelp’s blog.
I’m no lawyer, but I know a racket when I see one. Anybody who calls to say that you now have a problem but that they can make that problem go away for $75 a month isn’t your friend.
Dean, the marketing consultant, said that Yelp is a fact of life for small businesses and that challenging the company’s policies is going to be “a fight you’re not going to win.”
Instead, he advised companies to focus on Google and other online resources, and not lose sleep over any shenanigans Yelp might pull.
That’s probably wise. But it doesn’t excuse bad business behavior.
I asked Fonger how Yelp’s tactics differed from, say, Tony Soprano’s or Michael Corleone’s.
“Well,” he answered, “no one’s come by to break my legs.”
Then he thought about it a moment. “At least not yet.”
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to email@example.com.
Yelp’s tactics feel ‘nefarious’ and ‘fishy,’ even if they’re legal
It could be said that Yelp creates a problem for businesses and then offers to fix it — for a price.
April 03, 2014|David Lazarus
Yelp denies allegations that it plays up bad reviews if a merchant doesn’t… (Scott Eells, Bloomberg )
Among the frequently asked questions on Yelp’s website, there’s this: “Will Yelp remove or reorder bad reviews if a business pays for sponsorship?”
And the answer: “No. You can’t pay us to remove or reorder your bad reviews — it’s just that simple.”
It’s not that simple, at least if you listen to the many small-business owners who say Yelp routinely uses bad reviews and competitors’ ads as leverage to get merchants to cough up some cash.
“They continually harass you and strong-arm you to get you to pay for their service,” said Randy Boelsems, 64, who runs a boating supply company in Fountain Valley.
And if you don’t play ball, he said, it’s likely that negative reviews about your company will be featured more prominently than positive ones.
Such criticism isn’t new, though it appears that Yelp has found new ways to lean on business owners. Earlier this week, I wrote about an Alhambra jeweler who said that after he canceled his Yelp ad, a saleswoman for the site contacted him to warn that competitors’ ads would now appear with his listing.
“She said that for $75 a month, she could make those ads go away,” Rick Fonger, 62, told me.
A Yelp spokesman, Vince Sollitto, defended this practice by saying merchants are being offered the chance to buy out the ad space accompanying their reviews.
Looked at another way, though, it could be said that Yelp creates a problem for businesses and then offers to fix it — for a price.
Kurt Snider, co-owner of a Solana Beach video production company, also was told by Yelp that if he wanted a rival’s ad off his listing, it would cost him.
“It’s unfair and unethical,” he said. “It should be illegal.”
Yelp has faced a number of lawsuits over its practices. They have been dismissed for lack of evidence, a company spokeswoman said.
In a 2011 decision, U.S. District Judge Edward M. Chen in San Francisco ruled that Yelp is protected by the federal Communications Decency Act when it decides which reviews to feature on its site.
The 1996 law shields websites from being sued for the content they publish, such as Nazi memorabilia offered for sale on EBay or hate speech in a discussion forum.
“From a small-business angle, is what Yelp does distasteful?” said Erik Syverson, a Los Angeles lawyer specializing in Internet law. “Yes,” but that doesn’t make it illegal.
Antone Johnson, a San Francisco lawyer who formerly worked as vice president of legal affairs for the dating site eHarmony, offered a similar perspective. He used words like “nefarious,” “crafty” and “fishy” to describe Yelp’s practices.
“It doesn’t pass the smell test,” Johnson said. “But I don’t see a statute that they’re actually violating.”
I spoke with a number of small-business owners who related stories about Yelp demanding payment to remove malicious reviews or being uncooperative in addressing false claims.
Illustrating the power Yelp has over merchants, some asked that their names not be used. They said they were afraid of making their relationship with the site even more troublesome or of drawing attention to negative reviews that Yelp has refused to take down.
A Southern California real estate appraiser pointed me toward a review claiming that he sent an unlicensed trainee to appraise a property, which would be against state law. He said that when he explained to a Yelp rep that this simply wasn’t true, the rep declined to do anything and refused to put a supervisor on the phone.
Chris Monks, 32, said he used to pay Yelp $300 a month to advertise his New Haven, Conn., moving company. Then he switched to the $75-a-month plan, which at least kept competitors’ ads off his listing.
After he canceled that in January, Monks said, “suddenly past negative reviews reappeared and all the good reviews disappeared.”
I checked out the Yelp listing for his company, 2 Young Studs Moving. There were four recommended reviews — a five-star review from February, a one-star review from 2012, a two-star review from 2011 and a five-star review from 2009. A mixed bag.
However, if you click on Yelp’s link to “reviews that are not currently recommended,” you’ll find some more negative reviews and then page after page of five-star reviews from recent years. It’s as if all the good reviews had been deliberately buried beneath the bad ones.
Yelp says it has no control over how reviews are played on the site. It says automated software chooses which reviews to recommend and which ones to downplay, and “treats advertisers and non-advertisers exactly the same.”
I asked to speak once again with Sollitto, Yelp’s vice president of corporate communications. A senior PR manager, Kristen Whisenand, asked what I wanted to discuss and then emailed me a statement.
“Not sure what’s left to explore here,” she said of allegations that Yelp is trying to extract money by running competitors’ ads on businesses’ listings. “Yelp disagrees and thinks it’s a perfectly standard advertising practice.”
Don’t trust Yelp reviews? Six tips for consumers
Here are some tips to help you wade through the endless sea of reviews on Yelp.
August 23, 2013|By Andrea Chang
Accusations about Yelp Inc.’s business practices and authenticity of reviews have angered scores of small-business owners.
They also have left some consumers feeling confused about what they can and can’t trust on the popular site, which features 42 million reviews on bars, restaurants, orthodontists, body shops, gyms, nail salons, hotels and much more.
Although Yelp is the leading user-review website, plenty of other sites offer online reviews from users. For restaurants alone, people can turn not only to Yelp but also to OpenTable, Google and MenuPages, among others.
Here are some tips to help you wade through the endless sea of reviews on Yelp:
•Don’t rely solely on the overall star rating. Read a bit deeper because the rating can be misleading, especially if reviewers are basing their scores on something you don’t particularly care about, such as valet parking.
•Change the way reviews are sorted. The priority is important because most users look at only the first few reviews. When you first arrive at a company’s Yelp page, it automatically shows you reviews that are ordered according to “Yelp Sort,” which is “determined by recency, user voting and other review quality factors.”
Yelp says Yelp Sort is applied to all businesses regardless of whether they advertise, but the method raises suspicions that Yelp unfairly manipulates the order. You can re-order the reviews by clicking one of several options, including sorting by date or star rating.
You also can choose to look just at reviews that have been deemed useful by other Yelpers, or read reviews only written by “Elite” Yelpers, people who are extremely active on Yelp and thus expected to be more credible.
•Search for what you care about. Yelp enables people to search for specific terms within a business’ mass of reviews, which is helpful when a business has hundreds or thousands of reviews. For instance, if you want to know whether a restaurant is pet-friendly, search for “dog” within that restaurant’s reviews. You can search for customer service or other terms to narrow results to what you care about.
•Look at an individual reviewer’s statistics. You’re more likely to trust reviews from people who write frequently and who have a good distribution of stars that reflect a mix of positive and negative reviews.
•Check out the filtered reviews. Many business owners who don’t advertise with Yelp believe that their favorable reviews are filtered out, leaving only the negative ones behind. On the opposite end, there have been accusations that Yelp filters negative reviews for businesses that do pay up. If you’re suspicious, scroll to the bottom of a business’ page and click on filtered reviews. Then you can decide for yourself.
•Write your own reviews. Some people say reviews never seem to be in line with their own experiences. So start writing your own.
For Yelpers who are confused about why their reviews have been filtered in the past, it helps to include a photo of yourself, to write several reviews to build legitimacy and to include useful information instead of short, random generalizations such as: “Food was bomb.”
Despite some consumers’ misgivings about the site, Yelp has 108 million visitors a month, making it the place to go for business reviews. Those numbers understandably make business owners with poor ratings nervous.
By hosting 22 town halls in major U.S. cities this year, Yelp hopes to smooth things over with business owners and dispel much of the speculation surrounding the San Francisco company.
“Over the last few years we’ve ramped up our efforts,” Yelp spokeswoman Rachel Walker said. “There’s just a general misunderstanding.”
Yelp is not liable for bad ‘star’ ratings of businesses, court rules
By ASSOCIATED PRESSSEP 12, 2016 | 4:10 PM
Yelp Inc.’s star rating system does not make the San Francisco company liable for negative reviews posted on its site because it relies on material posted by users, a federal appeals court ruled Monday, dismissing a libel lawsuit filed against Yelp by the owner of a Washington state locksmith company.
The 9th U.S. Circuit Court of Appeals said the star rating system that Yelp features is based on users’ input and is not content created by the company, whose site helps guide people to restaurants, plumbers and more. Under federal law, the decision said, Yelp is not liable for content it gets from its users.
The ruling focused on the libel lawsuit filed by Douglas Kimzey. The court said Kimzey’s business received a negative review on Yelp in 2011.
Kimzey claimed the negative review about his business was actually about another business, and said Yelp transferred it to his business in an attempt to extort him to pay to advertise with the company.
The appeals court called Kimzey’s allegations “threadbare” and said there were no facts supporting that Yelp fabricated content under a third party’s identity.
“We fail to see how Yelp’s rating system, which is based on rating inputs from third parties and which reduces this information into a single, aggregate metric, is anything other than user-generated data,” Circuit Judge M. Margaret McKeown said, writing for a unanimous three-judge panel decision.
The appeals court has ruled previously that under the 1996 Communications Decency Act, websites that provide “neutral tools” to post material online cannot be held liable for libelous material posted by third parties.
It also dismissed Kimzey’s claim that Yelp should be held liable for distributing reviews to search engines. The appeals court said distributing the content does not make Yelp the creator or developer of the content.
Kimzey served as his own attorney and said he plans to appeal to a larger court panel.
The appeals court “rightly confirmed Yelp’s ability to provide a forum for millions of consumers to share their experiences with local businesses,” said Aaron Schur, Yelp’s senior director of litigation.
Kimzey said he lost 95% of his business after getting one star on Yelp.
“If you have a one-star rating, people won’t go near it,” Kimzey said. “They don’t care if you’ve been in business for one week or 25 years.”
FTC Discloses Small Business Complaints Against Yelp
Greg Sterling on April 4, 2014 at 11:30 am
Many small businesses continue to feel that Yelp is unfair or complain that Yelp salespeople are using strong-arm tactics to get them to buy advertising on the site. Claims of “extortion” against Yelp have persisted though never been proven with evidence and the company has successfully defended a number of lawsuits on those grounds.
These “extortion” claims again resurfaced in two articles published this week. One in the Wall Street Journal, focused on a lawsuit brought by Hadeed Carpet in Virginia over anonymous, critical reviews on Yelp. The business owner claims that the reviewers were not actual customers and sued to get their identities.
Yelp intervened in the case to protect the First Amendment rights of its users to anonymity. Yelp cannot be sued for the content posted by its users (e.g., for libel). The Virginia state court of appeal ruled that Yelp must disclose the identities of the seven individuals who posted the anonymous reviews on the Hadeed profile. Yelp has appealed to the Virginia Supreme Court.
Another article, more anecdotal in nature, appeared in the LA Times. It characterizes Yelp sales practices as a small business “shakedown.” In particular the article objects to the practice of asking business owners to advertise as a way to remove competing ads on their profiles.
Beyond this the Wall Street Journal reported on FTC disclosure of complaints filed by business owners against Yelp. The disclosures were made in response to WSJ Freedom of Information Act requests. Most pertain to Do Not Call requests made by the business owners. I’ve embedded the letter below.
In essence the letter says there have been 2,046 complaints against the site. Most of the disclosed complaints report that Yelp sales reps continue to call after they’ve been asked not to by the involved businesses. One complaint invokes the “extortion” concept but others do not:
Yelp continues to call our business trying to extort us for advertising dollars. They call, solicit us, and when we decline, they tarnish our small business’ image on their website. I’ve repeatedly demanded for Yelp to stop calling us, however they still call about every 2 months. From now on, I will log their call as a complaint.
For context and comparison, Google also has numerous FTC complaints on file.
Yelp’s algorithm flagging questionable or dubious reviews has long been the subject of confusion and controversy among business owners. The uncertainty surrounding its operation and the “filtering” of positive reviews by Yelp has sparked frustration and fueled various conspiracy theories. However Yelp has a critical interest in protecting against fraudulent or fake reviews.
Yelp has made numerous efforts to explain what it used to call its “review filter” to SMBs. However, it appears the site needs to also do a better job of this and of sales training (and/or prospecting) to prevent the kinds of complaints disclosed by the FTC.
By Associated Press
October 13, 2014 | 11:06amModal Trigger
Restaurants are fighting back against Yelp, which allegedly extorts restaurants by raising or lowering their reviews based on whether they buy ads on the review site.AP
SAN FRANCISCO — First the chefs of a small Italian restaurant got mad at online review site Yelp. Instead of trying to get better reviews, they decided to take a different approach: get terrible ones.
The campaign helped Botte Bistro get a rating of one out of five stars, as more than 1,000 reviewers left hundreds of tongue-in-cheek reviews panning the Richmond, California, eatery, said chef Michele Massimo, adding that it boosted business.
It was the latest protest among businesses which for years have complained that Yelp was extorting them by raising or dropping ratings depending on whether they advertised with the Internet’s most popular review site.
Yelp has persistently denied those claims on its website, in court and at every opportunity when the question is put publicly to the company.
“It wouldn’t pass the straight face test,” Yelp spokesman Vince Sullitto said of the extortion claims.
Sullitto said Yelp attracts millions of viewers and sells advertising to 80,000 businesses because of the site’s credibility with consumers. Sullitto said many of the company’s critics are businesses that have received bad reviews.
Last month, the 9th US Circuit Court of Appeals tossed out a lawsuit filed by several businesses claiming Yelp extorted them by removing positive reviews after advertising sales pitches were turned down.
The court is one rung below the US Supreme Court and the ruling could have been a definitive one for Yelp.
Instead, it served to fuel the company’s critics because the court said that, even if Yelp did manipulate reviews to penalize businesses, the practice would not constitute extortion.
The court said it found no evidence of manipulation and that it was ruling narrowly only on the question of extortion. Nonetheless, the company’s critics said the ruling supported their claims.
Even before the 9th Circuit ruling, Yelp was battling two lawsuits filed by company investors who make similar extortion claims.
The suits, filed in San Francisco federal court over the summer, allege that the company’s stock traded at artificially inflated prices because the “company tried to sell services designed to suppress negative reviews or make them go away” and then lied about it.
[Yelp is like a] modern-day version of the Mafia going to stores and saying, “You want to not be bothered? You want to not have incidents in your store? Pay us protection money.” – California judge
The company has yet to formally respond to the lawsuits in court, but says it will fight these legal actions as well.
Last year, a lawyer serving as a small-claims judge in San Diego likened Yelp to a “modern-day version of the Mafia going to stores and saying, `You want to not be bothered? You want to not have incidents in your store? Pay us protection money.’”
The judge, Peter Doft, made the comments when he ordered Yelp to pay San Diego lawyer Julian McMillan $2,700 over a contract dispute involving advertising on Yelp.
The award was later overturned by a higher court, which ruled that McMillan’s dispute with Yelp should be decided by an arbitrator instead of a court. McMillan didn’t pursue his claim.
But Yelp did file a lawsuit against McMillan, alleging he and his employees submitted fake Yelp reviews of his law practice. McMillan denies the charges and alleges that Yelp sued him because of his small-claims court victory.
The allegations are so widespread and have persisted for so long that the company asks on its website: “Does Yelp extort small businesses?” The company answers no.
Yelp has had a complicated relationship with the merchants, restaurateurs and other small businesses on which the company depends for advertising revenue. To attract advertising, Yelp needs to maintain a popular and credible site.
To do this, Yelp says, its uses an algorithm to weed out fake reviews submitted by business owners, relatives and friends that is often misunderstood. The automated removal programs accidentally erase many positive reviews written by legitimate customers.
Yelp concedes that removing legitimate reviews is not ideal, but argues that’s the price it pays for its credibility. Furthermore, Yelp keeps details of its algorithm under wraps so its review system can’t be easily exploited and gamed.
That secrecy also breeds suspicion.
“We don’t know who is leaving the reviews, and we don’t think it’s fair,” said Massimo, the chef. “You are so vulnerable.”
Massimo said he and his partner decided to launch their novel protest for a one-star rating after receiving several aggressive sales calls from Yelp that they perceived to be veiled threats. The ploy worked and business continues to be brisk, he said.
“It was the best marketing idea I’ve ever had,” Massimo said. “Thanks, Yelp.”
Category: Reputation Management
We’ve talked about the importance of online reviews a lot lately, and Yelp is one of the more popular places to leave and read reviews.
As the site has become more influential, it has been fraught with controversy. From businesses selling manufactured reviews to both reviewers and businesses complaining about the filtering algorithm, to accusations of extortion against Yelp itself, there’s no shortage of online debate.
The thing is, Yelp doesn’t seem to be going anywhere. Although it did struggle as a business for a few years between 2012 and 2015, the popularity of the online review site hasn’t slowed down—and this means that you need to be prepared for the problems associated with Yelp.
Here are some of the more common complaints, and what you can do to handle them.
Problem: Some clients opened Yelp accounts to post a review, but their reviews of my practice are filtered or “not recommended.”
Yelp’s goal is to provide quality reviews of businesses by people who have used these businesses. To do that, it’s built a famously fluid filtering algorithm that looks for red flags that might indicate a review is fraudulent.
Reviews that pass the test appear on the business page under “Recommended Reviews.” Reviews that don’t pass end up hidden further down the page, and users have to click on the arrow to see them.
Naturally, the factors in the algorithm are top-secret; after all, if everyone knew how to beat it, there would be no point in having it. As Yelp explains it:
“Every Yelp review is automatically evaluated by Yelp’s recommendation software based on quality, reliability, and user activity on Yelp. More often than not, those useful reviews come from active members of the Yelp community.”
This would seem to suggest that a reviewer’s activity on Yelp is a big factor. If it’s someone’s first review, it’s more likely to be filtered because the reviewer doesn’t have enough sway on the site yet. This is because it’s not uncommon for people to make fake accounts to post a single spam review.
Tip: Provide more than one option when asking for reviews.
It’s important to note that genuine reviews that get caught here may not stay in the filter forever—as the reviewer builds up a reputation on the site, all of their reviews will be affected, and a good review can be pulled out of the filter.
To avoid the issue of waiting for someone to build up enough rapport on the site, though, provide options for pet owners who want to leave reviews. There are all kinds of options out there for reviews, including Google My Business, Facebook, Angie’s List, and more.
Problem: I only have one review, and it’s negative.
This happens all too often—and if left alone, it can leave a bad impression of your practice.
Tip: Get more reviews.
Yelp adamantly denies that it filters out positive reviews while recommending only negative ones, so logic dictates that getting more reviews means that at least some of your reviewers will pass the filtering test and will appear in the recommended reviews.
It’s a common thought out there that asking for reviews violates Yelp’s terms of service, and certainly there are pages on the site that indicate this position. Yelp does discourage business owners from asking for reviews—but when asked directly, it stated that simply asking if customers would write a review of your business did not necessarily constitute a violation of the terms of service.
What does violate the terms of service? Incentivizing customers to leave reviews. So don’t do it.
Problem: A competitor or disgruntled former employee posted a fake negative review.
Again, this can leave a bad taste in the mouths of potential clients—and is exactly why Yelp has a flagging system.
Tip: If you can prove it, report it.
Posting reviews of an employer, former employer, or competitor is against Yelp’s terms of service, so if you’re absolutely sure of it, report the review to Yelp. Be sure to do your research first, and make sure you have proof of the reviewer’s identity, as well as proof that it’s a conflict of interest or otherwise violates the content guidelines. Yelp will not remove reviews based on allegations.
Problem: I have no proof that the review is fake, so Yelp won’t take it down.
You tried to report the review, but without evidence, the case fell through. What now?
Tip: Trust the judgment of Internet users.
As we discussed in a previous post, you should respond to every negative review online—and that includes the ones that you think are fake. However, you definitely shouldn’t make any accusations against the reviewer, because an uninformed reader could perceive you to be the disgruntled party.
Instead, reply in your usual respectful, helpful way, inviting the reviewer to contact you to resolve the situation. Much like on social media, readers will see this and although they may not know the review is fake, they will get an idea of your customer service and how you treat complaints and decide for themselves.
Problem: Someone posted a negative review on my Yelp page, but it’s not actually of my business!
Mistakes happen, but the issue here is that this both damaging for your business, and potentially a violation of Yelp’s terms of service. You want to get this situation remedied as soon as you can.
Tip: Report it.
It’s against Yelp’s terms of service to post a review of a business if there wasn’t a consumer experience—but it’s important to remember that as far as online review websites are concerned, just because there wasn’t an exchange of money doesn’t mean there wasn’t a consumer experience. Simply not having a record of the person being a customer may not be enough to prove your case.
However, this doesn’t mean you can’t prove it. In some situations, like the practice that received a negative review for the care of a pet snake, you could probably make a strong case without evidence of the reviewer’s identity. Proving you’ve never treated snakes, for example, may be enough to prove that the review was intended for a different practice.
Problem: The nicest, most wonderful review we’ve ever received is filtered!
Again, this likely has something to do with the reviewer’s activity on Yelp. This review can be pulled out of the filter, but it will take time. In the meantime…
Tip: Ask the reviewer if you can use the content of their Yelp review as a testimonial on your website.
This is subject to your local veterinary association’s jurisdiction, but if they are that thrilled with their experience, chances are they will happily agree.
What should you avoid doing on Yelp?
There are a few things to be aware of so you don’t end up in trouble with the site.
Don’t buy reviews.
There are companies and individuals out there who will post positive reviews for a fee. Although it might seem like an easy way to boost your star rating, it’s a form of false advertising known as astroturfing. Yelp takes this very seriously—to the point where it has launched lawsuits and participated in undercover investigations to shut these businesses and individuals down. Operation Clean Turf, for example, shut down 19 such businesses and resulted in $350,000 in fines.
Don’t post fake reviews.
It’s good practice for people who run businesses to post reviews so they get an idea of how the community works, but do not post fake reviews. It’s unethical, and you wouldn’t want someone to do it to your practice.
Don’t incentivize online reviews.
Offering any kind of reward for an online review, whether it’s a prize, a monetary amount, or even a discount, violates Yelp’s terms of service. Just ask your clients nicely to leave reviews for you. There are many people out there who’d be willing to post a review but haven’t simply because they haven’t thought to.
Don’t feel pressured into paid advertising.
There are plenty of stories from businesses who feel their reviews were unfairly filtered just after they declined a sales pitch to advertise, or found fewer reviews were filtered as soon as they bought some ads.
The data doesn’t seem to support these stories, though. According to a study in the Harvard Business Review, researchers spent three years going through filtered and unfiltered
Michael Luca, one of the authors of the study, appeared in a video from the Washington Post saying: “We’ve looked into data based on people who advertise and people who don’t advertise, and we don’t see any difference at all in the likelihood of having reviews filtered.”
If a sales representative from Yelp does call after you’ve claimed your business page and you don’t want to advertise, just politely decline
Yelp, the San Francisco-based tech giant that has grown into a $3.4 billion company on the strength of its business-review service, has a little problem. The customers for Yelp’s advertising services are the businesses getting reviewed on Yelp. Yet more and more small business owners loathe Yelp, and consider it a technologically-advanced version of the time-tested protection racket. “Nice little business ya got here…be a shame if something happened to it.”
According to many small businesses, they are being extorted; either they use Yelp’s advertising services, or face reputational ruin that will force their businesses to close. The accusations are not new. Yelp has been under investigation by the Federal Trade Commission, and also faced a class-action lawsuit. Yelp’s PR has been quick to tout that the FTC closed the investigation without taking action, and that the class action, Levitt v. Yelp, was dismissed by the Ninth Circuit Court of Appeals.
What they’ve not been so quick to point out is exactly why it was dismissed. According to the summary of the court’s opinion, “The panel held that the business owners failed to state a claim for extortionate, and therefore unlawful, business practices in violation of California’s Unfair Competition Law because, under the Hobbs Act and California law, unless a person has a pre-existing right to be free of the threatened economic harm, threatening economic harm to induce a person to pay for a legitimate service is not extortion.“
For readers not versed in legalese, the panel essentially said “We’re not saying businesses aren’t being extorted, but there isn’t currently a law that says someone has a right NOT to be extorted.” That’s hardly a vindication of Yelp’s business practices.
Despite the dismissal of the class-action suit, Yelp still faces a legion of small business owners hungering for it’s demise.
A Filmmaker Takes On the “Billion Dollar Bully”
When Kaylie Milliken heard from her doctor that Yelp was pressuring the doctor to buy Yelp ads, she decided to investigate. At first, she found Yelp’s explanations credible.
“But as I looked into it,” she told The Technoskeptic, “I realized it was a complete smoke screen.” Finding story after story of small businesses being abused by Yelp, Milliken started a Kickstarter campaign to make a documentary. “Our campaign met 150% of its funding goals within two weeks.” Asked who donated the money to fund the film, Billion Dollar Bully, Milliken replied, “Small business owners.”
The first-time filmmaker says Billion Dollar Bullywill refute Yelp’s claims that the lack of an active FTC investigation and dismissal of the class-action suit means Yelp has clean hands. She declined to share the specific refutations which she says are in her documentary, possibly because she didn’t want to give out spoilers before release, but she did urge The Technoskeptic to read the language of the Ninth Circuit court ruling and draw our own conclusions.
To Milliken, Yelp’s tactics are not excesses by a few over-zealous sales associates, but institutionalized bullying that follows the same pattern all across the country. “Over and over, I heard, ‘I declined to advertise, within a few days my good reviews disappeared, my negative reviews came to fore.’”
Rod Brant, host of the “What’s Working Now” podcast about restaurant marketing, crafts marketing plans for independent restaurants throughout the Midwest. He agrees with Milliken that Yelp has a terrible reputation among the independent restaurants that comprise his clientele.
“They hate it because they don’t trust Yelp. Yelp has a really serious reputation problem among the independents. They think that Yelp changes the position of reviews, and doesn’t feature good reviews, and instead features bad reviews if restaurants aren’t advertising with them. 80 percent of the restaurant guys that I talk to have that opinion.”
When asked if any of his clients are using Yelp currently, Brant said none are, none felt it was cost effective, and the one restaurateur who tried advertising with Yelp recently found it so ineffective they were willing to pay the early termination penalty to get out of their contract with Yelp.
Brant explained, “Their advertising rates, I would call them confiscatory. The only reason it is worth advertising is if the rumors are true: that if you don’t advertise with them, your star ratings go way down and your good reviews are hidden.”
None of Brant’s clients were willing to speak with The Technoskeptic about their experiences with Yelp on the record.
Janie Gilarde, a digital media consultant to restaurants in New York and New Jersey, dispensed with Brant’s Midwestern politeness and was far more direct about why every one of her clients hates Yelp, and unlike Brant, she was willing to share names: Bill’s Townhouse, Printers Alley, Galli, and Lucy’s Cantina Royale. “Yelp is a major player and oftentimes my biggest nemesis…. 100% of restaurateurs that I work with feel very negatively about Yelp. Most see it as the digital version of the gang you are forced to pay fees to for protection. It has an autonomous grip on consumers and is used as a tool for the majority of tourists seeking dining destinations on their visits, so particularly for restaurants that I work with in densely populated areas with lots of competition (for example, Printers Alley in Times Square), you are forced to pay up just to be seen….
“I get about three calls a day from Yelp sales recruiters at the start of every quarter regarding advertising if we are not enrolled. Calls, voicemails, repeat emails. It does not stop and borders on harassment. Until you pay, your page is subject to other advertising placements on your listing and you have no control over the images attributed. You can upload your desired photos, but they will be automatically sorted to the back unless you pay. Yelp does sort your reviews more favorably if you pay for advertising.”
Filtered Reviews Equal Suppressed Reviews
And how does Yelp sort reviews? Yelp calls it “filtering” and “recommending.” In a two-minute video about how reviews get filtered, Yelp says it will filter out reviews if it doubts their reliability. What it means in practice is that no matter how good or bad the filtered reviews are, they do not count towards the rating of the business. Only reviews “recommended” by Yelp actually count towards a rating. Yelp also stated in the video that currently, “about 75 percent of all reviews are recommended.”
Commenting on Yelp’s filtering practices, Bullydirector Milliken noted, “Yelp users often have no idea their reviews are being filtered out and have no effect. But most people who write a review on Yelp do it either because they loved a business, and want to help it, or hated their experience, and wanted to warn others. A lot of those reviews get filtered, which means ignored.”
Marketer Gilarde was clear that even those of her clients that use Yelp use it only grudgingly, but none of her clients were made available to The Technoskeptic to directly comment on why they so disliked Yelp.
“Not Going Down Like That”
Milliken likewise found legions of business owners willing to talk off the record about why they hated Yelp, but finding those who would go on the record was much tougher, as almost every business owner feared retaliation.
Yet occasionally, a business owner feels that Yelp has already done everything it can to extort them, and becomes willing to rage against the machine. One of them is Alia Meddeb, executive chef and co-owner of Baraka Café in Cambridge, Massachusetts, which offers the North African cuisine of Tunisia and Morocco.
Alia Meddeb stands outside Baraka Café in Cambridge, MA / ©The Technoskeptic
She explained that Yelp had been after her restaurant for years to advertise, but things took a serious turn for the worse in 2016, when she was forced to suddenly move to a new location following the death of her landlord and the subsequent termination of the restaurant’s lease.
The indignant chef, who has been at the helm of Baraka Café since 1997 explained, “I was doing very, very, very well before Yelp came on the scene. From four stars they brought me down to 3.5 (at our previous location) but they couldn’t do more, because I had so many positive reviews. When I move[d] to the new location last August, they called me up and started harassing me again. They removed my 350 reviews from my old location, plus 100 reviews from the new location, and started me from scratch.”
Meddeb explained, “I don’t want to use advertisement[s]. It is not just Yelp. I only rely on word of mouth. I’ve never needed to advertise, we have a really good reputation.”
Baraka Café’s current Yelp listing shows no Yelp reviews of the new location until late April 2017. The notion that a restaurant at a new location garnered not a single Yelp review for their first six months seems…improbable. But the lack of reviews was no accident, according to Meddeb.
“They wanted to crush us completely. By the time they came to me, suggesting indirectly, either I advertise with them, or they’d ruin my life, at the time I had too many positive reviews…then it went really bad. I think her name is Allison, she was a Yelp manager. She harassed me so much I hung up on her. Two days later, they removed me. They said the restaurant had moved to my personal address, not the new location…. They made people think that I was closed. And then the biggest thing was removing all my five-star reviews. They know if they remove all the good reviews and leave the bad reviews, this is like a cancer.”
We could not confirm Meddeb’s claim that almost 100 reviews of Baraka Café at the new location disappeared, but did find strong circumstantial evidence to suggest that she has been deliberately targeted with tactics that suppressed or outright removed positive reviews, while “recommending” bad reviews.
Since The Technoskeptic began monitoring Baraka Café’s Yelp listing, the number of “recommended” reviews, i.e. those Yelp does not filter out, hovered between a low of 16 and a current high of 22. When Yelp was “recommending” only 16 reviews, Baraka Café had a rating of 2.5 stars. When Baraka Café suddenly came back onto Yelp after the mysterious six-month absence with a 2.5-star review, Meddeb claimed her revenue dropped over $10,000 from previous months. With 22 reviews now recommended, the restaurant has clawed its way back up to three stars.
If you do a little math, and add back in the 30 recent reviews that Yelp has suppressed—one four-star review and 29 five-star reviews—Baraka’s overall rating jumps to 4.2 stars. That 4.2-star rating is roughly comparable to what the restaurant gets from Google Reviews: an average of 4.4 stars from a total of 107 reviews.
Baraka’s North African cuisine has gotten consistently high reviews from many other publications / ©The Technoskeptic
The Google reviews of Baraka Café stretch back 12 years, and include 20 reviews posted during the time the Café seemed to mysteriously disappear off of Yelp, before suddenly popping back into existence in May 2017. This is the time frame where Meddeb claims almost 100 positive reviews had accumulated at the new location, before suddenly vanishing. Whether or not this is accurate may never be established, short of a court compelling Yelp to release their computer logs.
But while monitoring Baraka Café’s Yelp listing for the last two months, The Technoskeptic did notice two reviews that went missing. They were not moved from “recommended” reviews to “filtered,” reviews, or vice versa. They just disappeared.
And what is indisputably clear is that Yelp’s claim that 75 percent of the reviews that get posted by Yelp users become recommended reviews is wildly inaccurate in the case of Baraka Café. When Yelp was only displaying 16 reviews and filtering out 30, it was displaying roughly 35% of all the reviews of Baraka Café, and suppressing 65% of them. It recommended less than half the claimed figure of 75%. Most importantly, none of the suppressed views were negative, only positive reviews were suppressed.
After losing so much money and suffering such aggravation, why has Chef Meddeb been willing to go on the record against Yelp, when so many others have been intimidated into silence?
Meddeb heatedly explained, “Pardon my language, but these people are scum. Go to [the] Better Business Bureau and you will see. Yelp has people crying, crying! They are closing businesses and they don’t care…. I’m 62 years old, all this lifetime I’ve spent in this business. They want me to just shove it and shut my mouth and walk away with my tail between my legs and lose everything. I invested my life savings in this business. I am not going down like that.”
While it was clear the fired-up Meddeb would hold a big party if Yelp disappeared tomorrow, this was somewhat surprisingly not a sentiment completely shared by Billion Dollar Bully director Milliken, despite the many business owners she’s personally talked to who have been harmed by Yelp’s tactics.
Asked what she’d like to see happen at Yelp in response to her film, she explained, “The advertising they are selling is not good, not effective, it wastes a lot of money. I’d like for them maybe to make a public apology, but that is not going to happen with this CEO. Yelp has lot of arrogance in their C suite. If they could listen to and digest feedback—what they tell all the small business owners they need to do to get better ratings—Yelp could have a good business.” But Milliken believes that won’t happen unless Yelp is forced to.
Yelp has lately been on a spree to buy back its outstanding stock. The buyback not only boosts the stock price, it makes Yelp’s board less vulnerable to the kind of activist investors that recently ousted infamous CEO Travis Kalanick from Uber’s board. So the prospects of forced changed happening at Yelp anytime soon are dim.
Unless, of course, Milliken’s timing is just right, and Billion Dollar Bully finally ignites a firestorm that Yelp can’t suppress, no matter how many small business owners it leans on.
Yelp’s ‘Don’t Ask’ Policy Is Bad For Everyone… Including Yelp
- If soliciting reviews actually reduces the reviewer bias on Yelp and increases credibility, why would Yelp interfere?
- Not only is Yelp’s Don’t Ask policy bad for consumers and business owners, but it’s also bad for Yelp.
Photographer: Andrew Harrer/Bloomberg
Yelp announced last week that it would begin doubling down on its “Don’t Ask” policy, penalizing businesses that show signs of “organized review solicitation” by demoting their pages in the platform’s search results.
The company has repeatedly defended its policy (here, here, and here) by citing a 2016 research study from Northwestern University. The study states that “customers who are prompted (by an email) to write a review, submit, on average, up to 0.5 star higher ratings than self-motivated web reviewers.”
Yelp argues that its Don’t Ask policy is good for consumers because soliciting reviews leads to biased reviews that “artificially inflate…search rankings and online reputations.”
The only problem with that is that the exact opposite is true.
Anonymous platforms have a tendency to skew toward the negative. Take, for example, the anything-goes, troll-like behavior that’s become so popular on the forum 4chan. Business owners have long complained of a negative review bias on Yelp, where angry and disgruntled customers are more likely to organically volunteer their thoughts than their satisfied counterparts
Ironically, the study Yelp uses to defend its policy actually says the exact same thing. According to the study, “self-motivated reviewers are more likely to be dissatisfied” leaving many businesses’ Yelp pages with a misrepresentative collection of poor reviews.
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How to solve the problem? According to the study’s authors, review solicitation.
“[S]ending email prompts taps into an entirely new segment of the purchasing population without disturbing the population that is already reviewing, making the new set of reviews more representative.”
In the end, the most insidious form of biased content on the site is not solicited reviews, and not even fake or manipulated reviews, but a self-selected group of dissatisfied customers who are more likely to write reviews than any other group of people. By asking customers for reviews, businesses correct for an inherently negative reviewer bias, a move that helps consumers make better-informed purchasing decisions.
AP Photo/Eric Risberg, File
Why Does Yelp Stop Businesses From Soliciting Reviews?
To make money? Maybe. After all, Yelp does profit when negative reviews drive desperate business owners to buy from the review site.
“The perception that paying Yelp will get you some ‘in’ is out there,” explains Josh Rubin, Managing Partner of Post Modern Marketing. “And it’s true to an extent. As a paid advertiser, you get an account rep who will help you with your page and give you tips on flagging false reviews.”
True as that may be, Yelp’s interference in review solicitation doesn’t make economic sense long-term. The company’s revenue model doesn’t benefit directly from bad reviews — that is, its ads don’t help remove or improve negative reviews, they just drive more traffic to a business’ Yelp page. That traffic won’t do much good for a business who is already being punished by a misrepresentative bad score.
I would be remiss not to mention that Yelp has battled years of extortion claims from business owners who say the company uses high-pressure sales tactics, threatening to raise or drop ratings depending on whether they advertised with the review site. The allegations are so widespread and have endured for so long that the company even has a page on its website dedicated to answering the question “Does Yelp extort small businesses?” (The company says no.)
Call me naive, but I agree. I find it hard to believe that a publicly traded company that undergoes annual audits and regulatory scrutiny would be able to pull off a heist as elaborate as that without getting caught. It’s much more likely, I think, that these claims are due to a combination of business owners frustrated with Yelp’s review filter speaking to bad salespeople at Yelp who imply they can manipulate reviews in order to land a commission.
When asked to comment, a Yelp spokesperson explained the company’s reasoning for its Don’t Ask policy like this: “A business is more likely to ask their satisfied customers to write reviews, and when businesses heavily solicit or offer freebies or discounts in exchange for reviews, that puts other businesses who play by the rules at a disadvantage.”
The problem, then, appears to be about warding off manipulated and coerced reviews to keep consumer confidence in the review platform.
I completely understand Yelp’s intention here. There are certainly some bad apples in the online reputation management space encouraging fake reviews and incentivizing real ones. But by conflating solicited reviews in general with coerced and fake reviews in particular, the company is essentially throwing the baby out with the bathwater. A policy that should have taken a hard stance on spammy and fake reviews instead asks business owners to stop engaging in the one activity that balances out the platform’s inherently negative bias.
To make matters more confounding, it’s not clear how Yelp hopes to catch business owners who solicit reviews. If the main goal is to improve review credibility, then why not make it harder to leave an anonymous review by requiring some sort of verification?
Or why not follow in Google’s footsteps and fight spammers with a more sophisticated filter algorithm? Yelp’s algorithm already takes a hard stance on suspicious reviews, filtering out 25% of reviews (often including real ones) and preventing them from affecting businesses’ scores.
Ultimately, then, the review site’s fight against soliciting reviews is quite bewildering.
The very study Yelp routinely cites in defense of the policy actually proves that soliciting reviews improves credibility, and Yelp would benefit from more advertising revenue if business owners encouraged customers to use the site more often.
The Yelp Inc. logo is displayed in the window of a restaurant in New York, U.S. Photographer: Scott Eells/Bloomberg
How Should Businesses Respond?
Whether or not Yelp’s policy is a sound business decision is left to be seen. In the meantime, business owners need to figure out their next move.
With those kinds of numbers, it’s obvious how the Don’t Ask policy might put businesses in a precarious situation. Either follow the rule and risk losing business due to biased negative reviews, or ask for reviews and risk getting penalized.
So what’s a business owner to do?
It’s worth a risk/reward analysis, for sure. If you already have a great Yelp score, it may not be worth requesting reviews of your customers, even if you do it in a fair and balanced way. But if you don’t have great reviews to begin with, then the penalty of being demoted in Yelp’s search results probably won’t seem all that scary. A 1 or 2-star average on Yelp is already so damaging that you won’t be in worse shape by earning less Yelp traffic.
For those companies willing to take the risk, the way to drown out a small, unrepresentative group of biased negative reviews comes down to earning lots more reviews from a larger, more representative sample.
The key is to make reviewing incredibly easy for your customers. Despite Yelp’s extreme policy, the platform offers some guidelines to get ahead:
- Include a “Find us on Yelp” sticker on your business’ storefront.
- Embed Yelp’s review badges on your website.
- Use Yelp imagery on your business cards, websites and in your email newsletters.
In fact, Yelp is also okay with business owners including language like “Check us out on Yelp!” in follow-up emails to customers. It’s a soft enough ask to earn Yelp’s approval, and most customers know exactly what you mean.
If you feel like Yelp is instructing business owners not to solicit reviews on the one hand, but encouraging soliciting techniques on the other, you’re not alone.
Perhaps the recent statement is just meant to deter the bad apples in the online reputation management industry. Or perhaps it’s a signal of more policy changes in the future.
Either way, the Don’t Ask policy misses the mark. Asking customers for reviews gives you the good, the bad and the ugly — not just the ugly. It’s good for consumers, it’s good for businesses, and it’s good for Yelp, even if the review site doesn’t realize it yet.
Sophia Harris · CBC News · Posted: Jan 14,
A number of small Canadian businesses say they find positive reviews of their businesses buried on the Yelp site, but Yelp says the placement is determined by software designed to prevent bias or fake reviews. (Richard Vogel/Associated Press)128 comments
Nadia Kalnieva says she can no longer bear to check online reviews about her Toronto moving company on Yelp. “I feel it’s too much bad energy.”
Her troubles with the hugely popular customer review website began about two years ago when she noticed a couple of negative reviews about her business were prominently featured. To make matters worse, she says, positive reviews about her company were hidden below in a “not currently recommended” category.
What I got without spoken direct words is, “Start paying, and we’ll find a way to get rid of the bad reviews.”— Nadia Kalnieva, S & Sons Moving
Then she starting getting calls from a Yelp sales representative trying to convince her to pay to advertise on the site.
She says she got the distinct impression from the salesperson that if she accepted, her problem would disappear: “What I got without spoken direct words is, ‘Start paying, and we’ll find a way to get rid of the bad reviews.'”
Kalnieva, who runs the small family company S & Sons Moving, refused to pay up. She believes Yelp continued to unfairly highlight her negative reviews, resulting in lost clients who got cold feet after reading them.
“I felt helpless,” she says.
Complaints piling up
Perhaps Kalnieva misread the situation. But she joins many small businesses in North America that have accused Yelp of a shakedown of sorts — implying in some way it can improve review listings for a price. Yelp is based in San Francisco, active in 29 countries, and boasts 139 million monthly visitors.
Ephraim Dloomy says his Yelp saga began about six months after he opened his Toronto restaurant, Ba-Li Laffa, in June 2012. Like Kalnieva, he says negative reviews about his business were posted prominently while positive, five-star reviews were hidden in the not currently recommended section.
Then he started getting frequent calls from a Yelp salesperson, trying to sell advertising. The restaurateur says the representative didn’t blatantly tell Dloomy he could solve his problem by paying up, but he believes that was the underlying message: “They said people who generally advertise with them end up having more stars. They implied it.”
Dloomy turned down the $350 a month advertising offer because he couldn’t afford it. Then he says his situation only got worse: “What I would notice is, I would get three to four positive [reviews] and a day later they would be gone,” dumped in the hidden section.
A furious Dloomy concludes, “Basically, I was being bullied into advertising.”
I was being bullied into advertising.— Ephraim Dloomy, restaurateur
Over the past few years, the Better Business Bureau has dealt with numerous complaints about Yelp involving allegations about manipulated reviews that Yelp offers to fix if the business pays to advertise.
One recent complainant went as far as to claim that “Yelp is trying to extort money from me … they are no different than the Mafia.” According to the Better Business Bureau, this issue has been resolved.
Yelp is also facing a class action lawsuit filed on behalf of shareholders. It alleges the company misled investors about its business practices to boost share prices. The suit filed this past August in the U.S. District Court in California claims Yelp posted unreliable reviews and offered to make negative ones go away if companies paid for advertising. The suit also notes that the company generates revenue primarily from ad sales.
Yelp fights back
In a statement, Yelp told CBC News that the lawsuit’s allegations “are without merit and we will vigorously contest them.”
The company also adamantly denies that businesses can pay to change their reviews or ratings: “There has never been any amount of money a business can pay Yelp to manipulate reviews and our automated recommendation software does not ‘punish’ businesses who don’t advertise.”
Yelp also points out that, so far, none of the allegations against the company have stuck.
This past September, the Ninth U.S. Circuit Court of Appeals tossed out a lawsuit filed by several businesses accusing Yelp of extortion by trying to bully them into advertising. The court said the allegations could not be proven.
The U.S. Federal Trade Commission received more than 2,000 consumer complaints about Yelpfrom 2008 to March 4, 2014. But according to a Yelp announcement last week, the FTC has closed its investigation without taking any action. The commission said it could not comment.
The computer’s in control
So why do some businesses believe Yelp is posting reviews unfairly? The company says that its automated recommendation software weeds out reviews that might be biased or fake. For example, ones a business may have solicited from family to boost its profile.
That explanation doesn’t sit well with NishiSood. She says she wrote a genuine, positive review for Swansea Massage Clinic in Toronto. But on Swansea’s Yelp site, it’s hidden in the not currently recommended section.
“I wasn’t even made aware that it got buried,” she says.
Yelp explained that sometimes the software filters out genuine reviewers because it doesn’t have enough information. But if the person writes more reviews, he or she could earn Yelp’s trust.
The co-owner of Swansea Massage, like others, complains of unjust review postings on Yelp. Beverly Gordon says that a few months ago the company approached her to buy advertising. But she claims the salesperson never implied he could manipulate her reviews: “They were very careful not to say that. They said they couldn’t promise anything.”
Even so, Gordon has signed up for the lowest ad package — $200 a month — in hopes her now hidden positive reviews, including Sood’s, will be prominently displayed. She says she reached her decision based on “what I’ve heard from other business who get positive reviews posted and they’re paying [for advertising].”
Is Gordon misreading the situation? She says she’s paying to find out. So far, her review postings haven’t changed.
Yelp extortion: Is it fact or fiction?
May 8, 2017 10:00 am by kaohanaViews: 924
Since Yelp.com’s inception in July 2004, the online business review company has been accused of altering reviews of businesses that do not pay for advertising on Yelp. Despite these allegations, none of these claims have ever resulted in a successful ruling in court. So how true are these rumors?
When a business pays for advertisement space on the site, Yelp will feature that business when customers use its search tool. Not only does advertising make up the majority of Yelp’s revenue stream, but it also allows paying businesses more visibility than non-paying businesses.
Louis Rossmann, owner of Rossmann Repair Group, had always considered the rumors about Yelp to be “crap” until they became a reality after he turned down paid advertisement on the site.
“I’ve been receiving calls from Yelp for years and years,” Rossmann said. “Last month, I received one, and like all Yelp salespeople this one does not want to leave you alone, they do not want to get off the phone, they do not allow you to hang up. The only way to get rid these salespeople is to be very rude because even if you hang up they’ll call you right back or they’ll email you right back. I was sick and tired of it, so I uploaded a video detailing my experience.”
Rossman uploaded a video to YouTube in which he cataloged his experience with a Yelp sales representative who would not stop contacting him. In the days following the release of his video, Rossmann started receiving defamatory messages and threats from friends and family of the Yelp salesperson. Rossman was informed that as a result of his video, the salesperson was subsequently fired due to her sales practices.
After a couple days of nothing happening, Rossmann found two reviews on his business’s Yelp page that were fake. He had no documentation of the people, devices or repairs that were claimed to be a problem by each reviewer. He inevitably discovered that the profiles used to leave the false negative Yelp reviews were left by friends of the terminated sales representative.
“Every time I have gotten a fake review and flagged it, nothing has happened for five years … The reason they deleted this (review) is because this review was so obviously an embarrassment to Yelp.”
This direct experience led Rossman to believe that it is possible Yelp promotes an aggressive sales approach that could potentially lead to a problem like his, where a “rogue” sales representative acts outside of the company’s code of conduct. But he is not convinced Yelp promotes extortion.
In 2010, a group of small businesses filed a lawsuit in San Francisco against Yelp, claiming that Yelp’s advertisement practices essentially amounted to extortion. The case was thrown out in 2014 with the court ruling that the plaintiffs had failed to prove Yelp was fabricating negative reviews and that although the “favorite review” feature is “hard-bargaining” it is not extortion.
For University of Hawai‘i at Mānoa student Omeed Rabani, lawsuits against Yelp are a dead end.
“You get what you get,” Rabani said. “Whether Yelp is extorting businesses or not, there are going to be false reviews anyways. That’s just the internet.”