QoD: What percent of reviews posted on popular e-commerce sites are fake?

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Dec 01, 2019
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Question of the Day, Behavioral Finance, Budgeting, Purchase Decisions

Just in time for the busy online shopping days ahead...

Answer: About 1/3 (33%)

Questions:

  • How much do you rely on online reviews before purchasing an item? 
  • Have you ever noticed a fake review while shopping online? What made you think it was fake?
  • Do you think that online reviews impact whether people purchase an item or not? Explain. 

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (Quartz):

Review tracking website Fakespot, which analyzes reviews from popular e-commerce sites, estimates that a third of online reviews on sites like Walmart.com, Amazon.com, and Sephora.com are fake. WSJ reported that the three retailers have disputed Fakespot’s findings, but have also taken steps to improve the reliability of reviews on their platforms. The US Federal Trade Commission recently revealed that beauty brand Sunday Riley faked reviews of its own products on Sephora’s website for more than two years. Just this week, online gaming service Steam deleted nearly 3,000 glitchy, low-quality games from its storefront, many of which lured buyers with fake reviews. 

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Supplemental resource:

Here's the email message that got one cosmetics company in hot water with the FTC (Federal Trade Commission) and demonstrates the steps they took to make their online reviews look legit. 

I would like everyone to create 3 accounts on Sephora.com, registered as a different identities. This is how you do it:

  1. Create a new persona. Choose their name, city, skin type.
  2. Setup a new email on gmail
  3. Before going onto Sephora.com, clear your cookie history EACH TIME …
  4. Connect to the internet ONLY using the VPN. Make sure to choose a city of origin that goes along with where your character lives. … 3
  5. Leave a review – make sure to NOT compare the product to other products, to not use foul language, and to be very enthusiastic without looking like a plant. Always leave 5 stars.
  6. Review a few other products as well – no skincare. Only review makeup, color, hair.
  7. Leave a review for a different product every other day so you build up history. You can also use this identity on Beauty Board.
  8. You will need to clear cookies and use the VPN every time, or your account will be flagged.
  9. Focus on Martian, UFO, Tidal, Power Couple, Good Genes, Luna.

The other thing, if you see a negative review – DISLIKE it. After enough dislikes, it is removed. This directly translates to sales!! Tidal and Good Genes are 4.2 and I would like to see them at 4.8+. UFO and Martian are at 4.9 – let’s keep it that way!

 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.