How to Size Up Online Reviews

published 31 July 2010

Before Rebekah and Andrew Beck of Falls Church, Va., bought their new digital single-lens-reflex camera, they scoured online product reviews to help them decide between two models. Rebekah finds the anonymous comments helpful. But she has wondered, "Are they just company minions putting up positive reviews?" Could negative reviews be the work of unscrupulous competitors?

The Federal Trade Commission, state attorneys general and civil attorneys all have a role in policing fake reviews. The FTC recently looked into a case in which bloggers who wrote about a retail event received gifts in return. Review site Yelp.com is being sued by business owners who claim it manipulates reviews -- a charge the company denies. In New York, a franchise business that performs face-lifts settled charges that company employees posted fake testimonials on the Web. Such cases aside, online reviews remain largely unregulated, says Eric Goldman, director of the High Tech Law Institute at Santa Clara University. Vetting is done mostly by the Web sites that run the reviews, and standards vary widely, says Goldman.

Be wary of a string of one-way reviews, positive or negative; look for a mix and ignore extremes. Visit multiple sites and seek out reviewers who have been on the site for a while, posting frequently about multiple items -- especially if their reviews get high marks from the site's other users. Signs of a planted review include a laundry list of product features or the same phrase repeated on multiple review sites. Before you share your own opinion, be warned: You could get sued for dissing a business online.

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Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage, authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.

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