Photo-Illustration: Intelligencer; Photos: Getty Images/Amazon
Amazon has a problem: people like free stuff. For years, third-party sellers have toyed with the mega-retailer’s all-important reviews section by sending complimentary products to real people in exchange for rave reviews — even if that sucks. Buying in from consumers looking for free headphones, body pillows, or indoor gardening kits, these manufacturers end up on the front page of a given search, boosting sales and frustrating competition stupid enough to come clean. Game.
The scam is quite easy. A company manufacturing a generic product in Shenzhen or Chennai uses a middleman to create a Facebook group, Twitter account or Telegram channel with a name that attracts users looking for free products. Private groups like “Amazon Product Review” and the more underground “R** fund Aftr R**vew” attract tens of thousands of people willing to write a few sentences and take a few pictures in exchange for a product – and can -be $5 to $10 more. (The cash bonus is usually paid out on PayPal, which Amazon does not use.)
That might sound like a lot of money to dish out, but Amazon’s review game can be big business: According to analysis by e-commerce consultant Pattern, a one-star boost on an Amazon listing can boost sales of as many up to 26%, which is why so many salespeople scoff at statistics. According to fraudulent review detection service Fakespot, around 42% of the 720 million Amazon reviews assessed in 2020 were fake. Review fraud isn’t evenly distributed – with more scams in the $15-$40 product range, where brand names aren’t a necessity. Think of household items and cheap tech products that consumers don’t expect to last forever. “When we look at the categories where you can start shipping a product, displaying a logo, and competing with other people, there’s a lot of fraud,” says Saoud Khalifah, founder of Fakespot. Which sector is the safest from fraud? “Books. You can’t fake a really detailed review by talking about a book.
Naturally, Amazon, whose search rankings for its millions of listed products rely heavily on reviews, wants these items to be real and not fake. Last week, the company took one of its biggest actions yet: filing a lawsuit in King County Superior Court in Seattle against administrators of more than 11,000 Facebook groups recruiting people for scams. with the aim of finding out who is managing the pages and closing them down. The company claims in the complaint that these groups violate Federal Trade Commission laws prohibiting misleading statements in which there is a hidden connection between a seller and a reviewer.
Fraudulent reviews aren’t the only scheme on Amazon. Buyers scam sellers by pretending their package never arrived in order to receive a second item. Sellers rip off competitors by leaving a bad review on their product page and downvoting the one-star review to hurt their search position. Influencers promising heaps of passive income through easy sales on Amazon are leaving their followers with storage units full of unsold stock when they discover the process is a lot less passive than they thought. Phishing scams are everywhere.
But fake reviews are one of the most lucrative and have grown significantly over the past few years. According to Brett Hollenbeck, a professor at the UCLA Anderson School of Management, fake reviews have exploded in recent years: “Amazon has started letting manufacturers in Shenzhen sell directly rather than through an intermediary. They will have ten nearly identical products, and there are huge incentives to get ahead of each other in the search rankings. A pandemic-driven surge in online shopping has led to a new wave of fake reviews for everyday items that people were suddenly afraid to buy in person at the pharmacy or grocery store.
Amazon says it’s making a huge effort to stop counterfeits, which can lead people on fixed incomes who aren’t particularly computer savvy to waste money on things that break right away. According to a recent study by consulting group The Behavioralist, fake reviews can cause online shoppers to overpay 12 cents for every dollar spent. “We want Amazon customers to buy with confidence, knowing that the reviews they see are authentic and trustworthy,” an Amazon spokesperson said. “That’s why we take review abuse seriously and aim to prevent fake reviews from appearing on our store.” In 2020 alone, the company claims to have removed over 200 million suspected fake reviews using AI models and employees monitoring the site.
Yet the crackdown has barely solved the problem: Amazon is playing a classic game of regulatory Whack-A-Mole, weeding out one commanding group of fake reviews only to see another appear immediately. And with 30 million reviews received each week, Hollenbeck thinks the company may not be aiming high enough. “If Amazon punishes real sellers a little more, that would change the incentives,” he says. “Their current method is to suppress at the reviewer level, not to punish the seller. They don’t take this as seriously as they should, and it shows in the way they regulate it.
As Amazon expands into new areas like healthcare, there may be an incentive not to crack down with all the force it can muster. “If Amazon removed 100% of fake reviews, they would lose hundreds of billions in shareholder value,” says Fakespot’s Saud Khalifah, who believes a complete removal would show how compromised the platform has become. With companies pushing for more reviews, Khalifah doesn’t expect the problem to go away with the legal move to Seattle, where Amazon’s headquarters are located. “Are you still getting spam? ” he asks. “The parallel is the fake review. The more money there is to be made, the more fraud we are going to see along with this growth.