Amazon, eBay users should embrace bad reviews

No matter what you do, not every customer will be happy.

By Jonathan Berr Oct 19, 2012 12:11PM
African-American woman shopping online copyright Ariel Skelley, Blend Images, Getty ImagesWhen I read about Yelp's (YELP) efforts to crack down on businesses buying positive reviews, it got me thinking about how fake reviews are a huge problem for Amazon (AMZN), eBay (EBAY) and the numerous other merchants that track consumers' views.

One study conducted by Bing Liu, a computer scientist at the University of Illinois at Chicago, found that 80% of the reviews on Amazon had four stars or higher, according to the Christian Science Monitor. He estimates that 30% of online reviews are fake. That number may be low, given the growing importance that businesses place on customers' feedback.

Some businesses have gotten the idea that the Internet is a place "where seldom is heard a discouraging word." Companies are extremely concerned -- and rightly so -- about their online reputations, because unfounded rumors can damage multibillion-dollar brands in the blink of an eye. Consumers, however, need to be suspicious about what they read online, because of the sophisticated ways companies "manage" their reputations.

Reputation Changer
, for one, tells advertisers that it can "suppress defamatory posts" and "eliminate negative BBB Ratings from high ranking status," information that consumers might want to know. Reputation.com says it can eliminate "negative material from your top search results," such as "unfair news articles" and "disparaging blog posts."

But far from deterring consumers, negative reviews should be viewed as a positive. My wife has a small side business, and I understand how difficult it can be to deal with the public. Customers may always be right, but they are also occasionally dumb -- and even crazy. Things go wrong in every business. Merchandise gets damaged in shipping or is defective. Sellers sometimes send the wrong product or ship something to the wrong place. Stuff happens.

Good companies learn from their mistakes. Honest ones admit they have them.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter@jdberr
Tags: AMZNYELP
5Comments
Oct 19, 2012 1:20PM
avatar
Being an Ebay seller for 6 years I find it disturbing that you state "fake reviews are a huge problem for Ebay" because any time I have received a bad feedback (Ebay's moniker for a review) I was always told it stays unless I can convince the customer to change it. Try that sometime if you want a lesson in frustration. You and others might add that all you have to do is have friends or relatives buy your stuff, write a great review and then refund the money. That's pretty costly (Ebay fees) in reality and very time consuming. Not to mention Ebay tracks and monitors this activity and will take note of buyers and sellers doing this refund activity consistantly, resulting in being banded from doing business on Ebay. Not a very smart strategy if you want to stay in business. 
Oct 19, 2012 2:32PM
avatar
I also have a Online business and a Phyical Business. It is a problem but I don't believe most business owners have time searching the internet for bad reviews and countering them. We have had ex-employees write bad reviews, bad mouth us on Social Media and customers that didn't get their way also tell lies about us. Very seldom does the happy customers seek out places to give us positive reviews. Let's face it, people are crazy, arrogant and self serving little brats. Do we make mistakes? Yes, but its hard to learn from a bad review when you did nothing wrong !
Oct 19, 2012 2:09PM
avatar
I hear you 53Jimmy, I've been doing it 12 years now myself.  For me bad feedback comes from buyers that don't read auctions.     Ebay doesn't review cases and auto closes giving the buyer the item and their money back.  

The reviews he's talking about are the "Product Catalog " reviews for products you can sell on eBay with reviews attached to that catalog listing.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

114
114 rated 1
278
278 rated 2
474
474 rated 3
641
641 rated 4
639
639 rated 5
663
663 rated 6
640
640 rated 7
499
499 rated 8
284
284 rated 9
122
122 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
COPCONOCOPHILLIPS9
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
KOGKODIAK OIL & GAS Corp9
CVXCHEVRON CORPORATION8
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.