Yelp – The Ugly

141020 Yelp LogoIn previous posts (Yelp – The Good and Yelp – The Bad), my co-authors and I discussed the value and challenges of Yelp for business owners. However, due to Yelp’s immense popularity, it has effectively become the go-to source for all kinds of reviews. Businesses see significant declines in revenue if their Yelp ratings decrease. And with this dominance comes some serious problems.

Yelp has become a cesspool of fake comments – a far cry from their original marketing slogan of “real people, real reviews.” It has become common for people to post negative and false comments. For example, the Yelp page for a local middle eastern restaurant contained two posts by people who claimed that the cooks there were doing things that were extremely unsanitary. After digging a bit deeper, it was clear these reviews were fake, as both reviewers had fake photos and had only posted a single review using their Yelp accounts. Worse, the reviews had racist undertones. In another case, a number of Yelpers wrote negative reviews for a Florida restaurant after President Obama visited there.

While fake reviews diminish the value proposition of Yelp (“to connect people with great local businesses”), what’s worse is when the business owners try to control their Yelp profiles. Some restaurant owners do it by posting signs like this: If you like us, please go on yelp and write a review. If you don’t like us, then don’t do anything! Ha-ha. Other business owners make business decisions based on what is needed to keep their Yelp rating strong. When trying to organize a farewell lunch for colleagues who were leaving, the owner of a local restaurant told us that he could not accommodate our large party because it would mean that other patrons would have to wait to be seated. He went on to say that if people have to wait, they go on Yelp and write negative reviews.

But these tactics seem harmless compared to what some other business owners do in order to influence their Yelp rating: they bully users by suing them. While the chances of a business owner prevailing in such a suit are slim, some do it simply as a scare tactic. Businesses send out cease-and-desist letters threatening to sue the reviewers for hundreds of thousands of dollars unless they remove the review.

With Yelp’s tremendous success comes a terrible dark side. Fake reviews diminish the site’s value and cause real economic harm. Lawsuits and bullying by business owners arguably cause even more harm because they reduce the likelihood that people will even write reviews. And if users stop writing reviews, there’s little reason for anyone to use Yelp.

Written by Dr. Atul Teckchandani

Note: This is the third and last post in a series of posts about the importance of Yelp and other review sites and how entrepreneurs can manage their presence on these sites in a manner that increases their firm’s reputation and sales. It was authored by Dr. Atul Teckchandani, Assistant Professor of Management at the Mihaylo College of Business and Economics, California State University, Fullerton.

Yelp Series:

Yelp – The Good

Yelp – The Bad

Yelp – The Ugly

Published by CSUF Entrepreneurship

We teach, coach and lead the principled, cross-disciplinary practice of entrepreneurship. We believe that, through determined practice, leadership and team work, our students, faculty, clients, volunteers and alums can systematically recombine the new and the old to forge new ventures, create an entrepreneurial culture, and dramatically benefit our community.

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