Fake reviews on the Web...caveat emptor
As comparison shopping sites grow in popularity, some merchants are feeding 'fake' reviews to hype their business.
By Parija Bhatnagar, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - You're a time-starved consumer, a week away from going on vacation. You need that new digital camera. But which one to buy? Quick, you go to a comparison shopping site...PriceGrabber or Shopzilla...to get other people's opinions about the best brand and price. But are those opinions true?

Be suspicious, say the experts. Anytime a company offers "consumer-generated" content as part of its business model, you should wonder about the legitimacy of the material.

"When you see merchandise or merchant ratings, or prices that look too good to be true, be cautious," said Heather Dougherty, analyst with Nielsen/NetRatings.

As online shopping's burgeoning popularity fuels a mad rush by both brick-and-mortar and "virtual" sellers to grow their brands in cyberspace, some sellers are resorting to underhanded methods like feeding bogus merchant reviews in a desperate move to get noticed in a crowded marketplace.

That's put comparison sites on guard. In an interview with CNNMoney.com, PriceGrabber CEO Kamran Pourzanjani said his company has beefed up its in-house security measures to weed out "dubious reviews." Nevertheless, some eventually slip through the checks and balances and make it onto the Web site.

One recent example on PriceGrabber looked like this: "Although you should not expect prompt shippin. (It took 3 weeks and several e-mails before I received my order.) I would order again from this merchant, just because the price was right."

What was the problem?

On the surface, the review appeared to be "honest," even noting a negative aspect with regard to the user's experience, the company said. However, red flags were raised when the reviewer then proceeded to mitigate the unpleasant experience and claimed that they would shop at the store again.

PriceGrabber subsequently conducted more checks and concluded it wasn't really a valid review.

"Right now only about 10 percent of reviews are problematic versus about 20 percent earlier," Pourzanjani said. There's also a self-policing process going on. Some of our users themselves alert us to reviews that they think look suspicious," he said.

Customer reviews of products usually appear to be authentic, Pourzanjani added. On the other hand, it's the customer reviews of merchants, such as the one above, that consumers shouldn't take at face value.

Real or bogus praise?

The purpose of comparison shopping sites is to enable consumers to make an informed purchase of a product or service, either online or offline, by providing consumers with "accurate" product and pricing information on millions of products sold at thousands of retailers.

Another key feature is the "customer-generated" reviews and ratings on those products as well as on the merchants who sell them.

For instance, PriceGrabber features millions of products and over 10,000 sellers at any given time on its Web site. According to Nielsen/NetRatings, the company pulled in 8.8 million unique visitors to the site in March, the latest data available.

By contrast, industry leader Shopzilla.com logged 19.1 million unique visitors and No. 2 player Shopping.com saw 18 million unique visitors to its site over the same period.

PriceGrabber has a team that reads and attempts to verify each review before it's posted on the site. The verification process includes, checking the IP address, using technology to flag suspicious reviews, sometimes even contacting the reviewer and asking for a product invoice number.

Sometimes language usage prompts investigation. One example involves a batch of reviews about the same merchant that used what he called "British English." Pourzanjani said he wouldn't be surprised if some companies are going as far to outsource fraudulent reviews.

However, he's quick to point out the company has made headway in combating the issue of fake reviews.

Most people don't engage in this type of activity, he said. Those that do are the very small sellers and not established retailers.

Shopzilla.com spokeswoman Helen Malani said the company is quick to pull the ratings of any merchant and re-rate it if it finds the reviews to be dubious. Similar to PriceGrabber's strategy, Shopzilla also checks IP addresses and requires customers to fill out pop-up customer satisfaction surveys before they make a purchase through Shopzilla.

"A few days later we also follow up with a fulfillment survey where we ask people if they got the product that was described on the site and if it arrived on time," Malani said. "The risk of bogus reviews is always there but the one great thing about the Web is the whole community aspect of it. People will quickly let us know is they spot something falsely advertised." She declined to say how many such reviews the company sees on a monthly basis but said it was a "contained situation."

Nature of the beast

Nielsen/NetRatings' Dougherty said it's hard to quantify the volume of fake reviews simply because companies don't like to publicly disclose that information.

"To an extent, it's almost the nature of the beast," Dougherty said. "Retailer want to overinflate their ratings with false information because a higher score could potentially mean more business for them."

Her advice to consumers is to do more research on their own and not rely just on ratings found on one or two sites.

Dougherty said she's heard about companies outsourcing bogus reviews but hasn't found enough evidence to support the notion that it's becoming a trend. She said companies might resort to outsourcing fake reviews because it's probably cheaper to pay someone in another country to do it, and probably harder to trace the source.

Jupiter Research analyst Vikram Sehgal, agreed with Dougherty that the onus is on the consumer to dig a little deeper before buying something on the Internet. At the same time, he said online consumer-generated content has become more popular than ever.

He cited the results of an in-house consumer survey of 2,500 online users fielded in April that showed 48 percent of those polled who said they made an online purchase also read reviews. "Most people don't seem to think these reviews are biased," Sehgal said.

------------------------------

What not to get Mom for Mother's Day. Click here for more.

The Internet wars: A report card. Click here for more. Top of page

YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.