Amazon has a problem: People like free stuff. For years, third-party sellers have been gaming the megaretailer’s all-important reviews section by sending complementary goods to real people in exchange for glowing write-ups — even if the thing sucks. Buying off consumers looking for free headphones, body pillows, or indoor-gardening kits, these manufacturers shoot to the front page of a given search, boosting sales and frustrating the competition dumb enough to play fair.
The scam is pretty easy. A company making a generic product in Shenzhen or Chennai uses an intermediary to set up a Facebook group, Twitter account, or Telegram channel with a name that attracts users looking for free merch. Private groups like “Amazon Product Review” and the more clandestine “R**fund Aftr R**vew” bring in tens of thousands of people willing to write a few sentences and take a couple pictures in exchange for a product — and maybe $5 to $10 on top. (The cash bonus is usually paid on PayPal, which Amazon does not use.)
It may sound like a lot of money to dole out, but the gaming of Amazon reviews can be big business: According to an analysis by the e-commerce consultant Pattern, a one-star increase on an Amazon listing can pump up sales by as much as 26 percent, which is why so many sellers are juking the stats. According to the fraudulent-review-detection service Fakespot, around 42 percent of 720 million Amazon reviews assessed in 2020 were bogus. The review fraud is not distributed equally — with more scams in the $15 to $40 range of products, where brand names aren’t a necessity. Think home goods and cheap-ish tech products that consumers don’t expect to last forever. “When we look at categories where you can start drop-shipping a product and slapping on a logo and competing with other people, those have a lot of fraud,” says Saoud Khalifah, founder of Fakespot. The most fraud-proof sector? “Books. You cannot fake a really detailed review talking about a book.”
Naturally, Amazon, whose search rankings for its millions of listed products rely heavily on reviews, wants those write-ups to be real, not fake. Last week, the company took one of its biggest actions to date: filing a complaint in Seattle’s King County Superior Court against the administrators of more than 11,000 Facebook groups recruiting people for review scams with the aim of finding out who is running the pages and shutting them down. The company claims in the complaint that these groups violate Federal Trade Commission laws prohibiting deceptive endorsements in which there is a hidden connection between a seller and reviewer.
Fraudulent reviews are hardly the only scheme on Amazon. Buyers scam sellers by claiming their package never arrived in order to receive a second item. Sellers scam competitors by leaving a bad review on their product page and upvoting the one-star review to hurt their search position. Influencers promising heaps of passive income through easy Amazon sales leave their followers with storage units full of unsold inventory when they find out the process is a lot less passive than they were led to believe. Phishing scams are all over the place.
But fake reviews are one of the most lucrative, growing considerably over the past several years. According to Brett Hollenbeck, professor at the UCLA Anderson School of Management, fake reviews have ballooned in recent years: “Amazon began letting Shenzhen manufacturers sell direct rather than through an intermediary. They will have ten almost identical products, and there are huge incentives to get ahead of each other in the search rankings.” A pandemic-driven surge in online shopping resulted in a new wave of false reviews for everyday items people were suddenly afraid to buy in person at the pharmacy or grocery store.
Amazon says it is making a considerable effort to stop the fakes, which can result in people on fixed incomes who aren’t particularly computer savvy wasting money on stuff that breaks right away. According to a recent study by consultant group the Behaviouralist, fake reviews can cause online shoppers to overpay 12 cents for every dollar they spend. “We want Amazon customers to shop with confidence, knowing that the reviews they see are authentic and trustworthy,” says an Amazon spokesperson. “That’s why we take reviews abuse seriously and aim to prevent fake reviews from ever appearing in our store.” In 2020 alone, the company says it took down more than 200 million suspected fake reviews using AI models and employees monitoring the site.
Still, the crackdown has hardly gotten rid of the problem: Amazon is playing a classic game of regulatory Whack-A-Mole, stamping out one group commissioning fake reviews only to see another pop up right away. And with 30 million reviews coming in each week, Hollenbeck thinks the company may not be aiming high enough. “If Amazon punishes actual sellers a bit more, that would change incentives,” he says. “Their current way is to delete at the reviewer level and not to punish the seller. They’re not taking this quite as seriously as they should, and that shows up in the way they regulate it.”
As Amazon expands into new sectors like health-care, there may be an incentive not to crack down with all the strength it can muster. “If Amazon deleted 100 percent of fake reviews, they would lose hundreds of billions of shareholder value,” says Saoud Khalifah of Fakespot, who believes a full culling would show just how compromised the platform has become. With companies always pushing for more reviews, Khalifah doesn’t expect the problem to disappear with the legal move in Seattle, where Amazon is headquartered. “Do you still receive spam emails?” he asks. “The parallel is the fake review. The more money there is to be made, the more fraud we’re going to see concurrently with that growth.”