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In today's post, we answer a great "Ask Us Anything" question that came in from G in Atlanta:
There are really two issues around paying or otherwise financially incentivizing people for reviews.
From the legal angle, we're dealing with the Federal Trade Commission (FTC). It is not illegal to compensate someone for consumer reviews / endorsements. However, the key here is DISCLOSURE. The person making the review or endorsement MUST disclose on the review that they received some form of monetary or non-monetary compensation. And if the company paying for the reviews uses them on their site, social media, or other marketing efforts, they must disclose that the person making the review was compensated.
Yelp Consumer Alert
Google and Facebook are just as aggressive. BTW, even contests that offer people a chance to win a "free" something or money off where the "cost of entry" is a review or rating is considered a violation of these guidelines.
Bottom line, a company may be able to get away with compensating people for reviews for a while, but they are playing Russian roulette and risking getting their business penalized or banned from important online search engines and directories, and even risking legal action from not only the FTC, but local business authorities as well.
It's just not worth the risk. Focus instead on just asking your customers to let you know how you're doing on one of the popular reviews sites. It will be much better for your business in the long run.
Do YOU have a question about local digital marketing?
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