|Mon Dec 10 2012 10:47:33|
Yelp Review Lawsuit: Implications for eBay and Amazon Sellers
By: Julia Wilkinson
The issue of online ratings and reviews has come into the national spotlight since the "Yelp" lawsuit, where housing contractor Christopher Dietz sued former customer Jane Perez for $750,000 in defamation charges for her scathing review of his business on the local opinions site. But while the suit may have seemed litigious to the average consumer, for eBay, Amazon and other online sellers, it may have seemed like it was about time, as they've been sweating out bad reviews -- and ones that they've felt were overly harsh or just plain wrong -- for years.
Perez had written that there was damage to her home and that jewelry was missing after she'd had work done from Dietz's company, Dietz Development LLC. The judge in the case ordered Perez to take down parts of those reviews, which an NPR article about the case called an "unusual step."
Her post allegedly included a list of accusations, including "damage to her home, an invoice for work the contractor did not perform and jewelry that disappeared," according to a Washington Post article about the case. The end of her post read, “Bottom line do not put yourself through this nightmare of a contractor.”
Was her review fair or not? If all her allegations were true and could be proven, the review would be fair in my mind. But if not, I think reviewers, and especially those shaded by the relative anonymity of the Internet, can be overly vitriolic, and forget that their words can impact businesses' ability to make money. One 2011 Harvard study showed that a one-star increase on Yelp leads to a 5 to 9 percent increase in revenue. This could logically be extrapolated to the probability that a one-star decrease could similarly detract from revenue.
In the online selling world, the lion's share of my reviews have been good. But there have been a handful of instances where I felt the negative feedback was unwarranted, especially with the extra steps I take when something goes wrong with an order. eBay sellers have long sweated out online reviews, and I think it's fair to say a single scathing review can have some kind of negative effect on their business.
An Amazon seller I know received a one-star review for an order that where the seller did indeed make a mistake, but the seller completely refunded the order and told the buyer to keep the item they had mistakenly sent. They also offered a free item. Did this budge the review? No.
I also know of two attorneys who, when Googled, have nothing but terrible reviews pop up, although I know these attorneys to be competent. The bad stuff floats to the top, it seems, or maybe it's just that the people who are really ticked off are the ones who go to the trouble to post. In any case, it's enough to drive many businesses to hiring an online reputation management firm.
(Since this Yelp lawsuit, several Yelpers have filed a type of protest by also posting one-star reviews, with comments like "Lesson learned - don't be specific in yelp reviews or you get sued by this company for $750,000." But some others have posted good reviews in support, one stating, "Wow, it saddens me deeply to see a business being unfairly criticized on yelp. Leave this man alone and let him feed his family. Please move on.").
As an online seller, or even a buyer, what do you think of the Yelp case? Does it highlight that individual consumers have power with which they should be responsible, or can they cite free speech as a reason to be as scathing as they want? Do you think a bad review has affected your bottom line? Post a comment here!