Fake Online Reviews Can Harm Businesses More Than Help

A new study from George Mason University suggests that businesses using fake positive reviews may damage their reputation and lose consumer trust.

The research examined Yelp's practice of placing a 'Consumer Alert' banner on the listing pages of businesses suspected of manipulating reviews, which typically remains in place for about 90 days.

'We don't know every signal Yelp uses to identify fake or paid-for reviews, but from what we know, Yelp relies substantially on reports from consumers and business owners,' said Yi Cao, assistant professor of accounting at the Costello College of Business at George Mason University.

Researchers found that businesses flagged for review manipulation experienced reputational damage and lost customer trust. The takeaway is to look beyond ratings on sites like Yelp or Amazon and be cautious of reviews that seem overwhelmingly positive or appear in large numbers over a short period of time.