Understanding paid reviews: What they are and how they can impact your business

Customer reviews play a crucial role in persuading potential buyers to try your business. They provide social validation and equip people with the necessary information to feel comfortable making a purchasing decision. While organic reviews are one of the most effective ways to build trust and grow your brand, they can be difficult to obtain. As a result, some businesses may resort to take shortcuts by paying someone to leave positive feedback. 

But is this practice allowed, and what are the risks? This blog will help you understand the ins and outs of buying customer reviews and the implications of your decisions.

What are paid reviews?  

Paid reviews involve compensating someone for leaving a review for your product. This can come in the form of monetary compensation or in exchange for products, discounts, or other incentives. But is this legally allowed?

Before we dive in, it's important to understand that paid reviews and fake reviews are not the same. Paid reviews can still be considered honest if the reviewer shares their genuine experience with the product or service and clearly discloses that they received an incentive to post a review. 

Fake reviews, on the other hand, are entirely fabricated and often written by individuals who have never used the product or service. These can be either positive or negative. A positive fake review is one where a business pays someone to write a glowing review, while a negative one could happen when someone spreads false rumours about a brand they dislike. Fake reviews are illegal in most countries because they're considered deceptive and misleading to consumers, and those involved can be subject to fines and other enforcement actions.

The legality of paid reviews varies by country, depending on the nature of the agreement and the platform where the reviews are posted. In many places, governments impose strict laws on how businesses collect reviews and ensure transparency. In Australia, the ACCC (Australian Competition and Consumer Commission) has strict guidelines, making it illegal for businesses to create fake or misleading reviews or to arrange for friends, family, or anyone else to do so. 

If you’re compensating someone to write a review, it must be disclosed in the review that the reviewer has a personal connection or commercial relationship with your business. Additionally, any incentives should be provided regardless of whether the feedback is positive or negative.

Complications with paid reviews

Now, while paying for reviews may seem like an easy way to boost your online reputation, it does have its drawbacks. Besides the legal complications, here are a few potential downsides you need to be wary of:

People may not trust your paid reviews

One of the biggest challenges with paid reviews is how potential customers perceive them. While there's nothing technically wrong with compensating someone for their honest feedback, it still doesn't carry the same weight as an organic recommendation where the person tries out your product and comes and writes of their own will. Paid reviews can come across as staged, causing people to question your brand’s credibility.

You have to question whether you're getting  genuine feedback 

While individuals have the freedom to share positive or negative feedback based on their experiences, paying them for their opinions may lead them to provide a positive review, even if their experience was less favourable. Although some brands might believe this strategy works in their favour, it ultimately hinders their ability to identify shortcomings and make necessary improvements. In our recent consumer insights and perception study, we found that while the majority of respondents stated that money wouldn’t influence their decisions, about 30% indicated they would likely leave a positive review as a gesture of gratitude, even if their experience hadn’t been great.

Paying for reviews is not a sustainable long-term strategy 

While paid reviews might provide a quick boost to your ratings, they aren't a sustainable model for building a strong customer base. Those who leave reviews solely for compensation often lack genuine loyalty to the brand. Additionally, relying on paid reviews incurs extra costs, which can negatively impact your business in the long run.

Best practices for effectively navigating paid reviews

• Disclose paid reviews: Set up a dedicated section or tag on your website or review platform to identify sponsored feedback. This helps maintain transparency and credibility when you have a mix of organic and paid reviews. 

• Encourage genuine responses: Clearly communicate to reviewers that you're interested in their genuine experience with the product or service, not just a positive review. Talk to them to understand how they used the product, what they liked, and where they see opportunities for improvement. Ask them to share images or videos of the product in use to add credibility to their review.

• Limit paid reviews: Instead of flooding your site with paid reviews, consider obtaining paid reviews only to jump-start the feedback process for newly released products or increase visibility during specific campaigns. This ensures a balance between organic and paid feedback, keeping your reviews authentic.

• Be transparent about the arrangement: Provide reviewers with guidelines and information on relevant consumer protection laws so they are aware of them. Asking reviewers to include a statement like, “This product was sponsored, but the opinions are my own," can help not only ensure transparency but also keep you compliant with advertising regulations.

• Maintain records of agreements: Keep email proof and agreements with paid reviewers to ensure clarity in case any issues arise. Having proof of communication helps protect your business from potential legal complications down the line.

We hope this blog gives you a better idea of how to navigate paid reviews and when to use them for your business. Are there any other blog topics you'd like us to cover? Let us know in the comments!

Note: This article is intended only to help business owners get a basic understanding of navigating paid reviews and should not be interpreted as legal advice for making business decisions.