Uncle Sam says “NO” to compensating for online reviews

compensating for online reviews

Please note: this post is my personal interpretation of what has been going on with recent FTC rulings and should in no way serve as legal advice.

Ever walked into a store and saw a sign that says “10% off in exchange for a review?” After a recent announcement and ruling made by the FTC, those sort of incentives are no longer kosher.

There have been plenty of crackdowns on online reviews over the years. Most of them have been for fake reviews or some other scammery. This latest ruling is the first (that I know of) to penalize a company for compensating or incentivizing for a review.

“Each violation of such an order may result in a civil penalty of up to $16,000.”

The car shipping company that was part of the ruling failed to meet FTC Guidelines in part by stating on their website “Google us ‘bbb top rated car shipping.’ You don’t have to believe us, our consumers say it all.” That statement in and of itself wasn’t wrong ,but the fact that they offered a $50 discount in exchange for these reviews is where they messed up. They also told customers they would be entered into a contest to win $100 in exchange for reviews.

In case you are unsure about what you can / cannot do in terms of online reviews, here is a basic summary:

  • you cannot pay someone to do a review
  • you cannot fake reviews
  • you cannot review yourself
  • you cannot give an incentive, discount or perk in exchange for a review
  • in some cases, you cannot ask for a review

The FTC made this nifty little video driving home the fact that you must disclose your relationship with a company before leaving a review. Example: if I go to my friends website (even if I am a customer) I must disclose “full disclosure” that I am a friend of his or hers within the review. They also make 3 main points within their revised guidelines (PDF):

  • Endorsements must be truthful and not misleading;
  • If the advertiser doesn’t have proof that the endorser’s experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances; and
  • If there’s a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, it should be disclosed.

Blogs and social media count too

This is not just limited to just online reviews. Blogs, guest posts, and press releases are included under this umbrella as well. Example: if I made a post on my website reviewing a hosting company and post a link to that website with a discount with an affiliate link, I must disclose that within the post. Many bloggers will simply include this in their terms of service or disclosure statement, but many of them don’t. In addition to the disclosure being present, it also must be prominent i.e. not buried deep within the website.

Lord and Taylor recently came under fire for not including #ad or #sponsored in an Instagram post which promoted some of their products.

When in doubt, disclose the fact that it is an ad.

My opinion

I tend to agree with the FTC about this. If you asked a friend if a restaurant was good, and he/she said “its awesome” but later found out he was compensated for that review, wouldn’t you feel a bit scammed? I know I would. Yes, this does make getting reviews difficult but it keeps everyone honest.

Really, the only legal way to get reviews (while staying within TOS of Google, Yelp, whomever) is to wait for the reviews to come in on their own, and to make it as easy as possible for people to leave a review.


Patrick Coombe
Patrick Coombe is the founder and CEO of Elite Strategies Llc. Patrick takes a hands on approach to managing Elite Strategies and loves to get involved with technical projects relating to clients inbound marketing needs.
Patrick Coombe
Patrick Coombe
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