Companies Must Take the Good (Reviews) With the Bad

No business likes negative reviews, but companies must deal with the consequences of unhappy customers. This is particularly true in light of recent Federal Trade Commission allegations levied against online fashion retailer Fashion Nova, LLC, which learned the hard way what happens when a company blocks negative product reviews from being posted online.

In late January, the FTC imposed a $4.2 million fine upon Fashion Nova—which also has a brick-and-mortar presence and a significant social media following—after it suppressed reviews from its website with ratings lower than four stars out of five in violation of the FTC Act. Fashion Nova did so despite representations that the product feedback listed on its website reflected the views of all purchasers who submitted reviews.

The case against Fashion Nova—the FTC’s first involving a company’s efforts to conceal negative customer ratings—has repercussions across industries, particularly the e-commerce space.

According to the FTC, “Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce.” Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, has made clear that “Fashion Nova is being held accountable for these practices, and other firms should take note.”

Shortly after its move against Fashion Nova, which has agreed to pay the fine and post all reviews of products currently being sold on its website, the FTC released new related guidance.

Soliciting and Paying for Online Reviews

In a piece entitled, “Soliciting and Paying for Online Reviews: A Guide for Marketers,” the FTC urges businesses to review the processes by which their reviews are collected and posted. The agency also offers the following rules of thumb to companies that solicit online reviews:

  • Don’t ask for reviews from people who haven’t used or experienced the product or service.
  • Don’t ask your staff to write reviews of your business, at least not without ensuring that they disclose in their review that you employ them and asked them to write it.
  • Don’t ask for reviews only from customers you think will leave positive ones.
  • Don’t ask family and friends for reviews, at least not without ensuring that they disclose their personal connection in the reviews.
  • If you offer an incentive for a review, don’t condition it, explicitly or implicitly, on the review being positive. Even without that condition, the review should disclose the incentive, because its offer may introduce bias or change the weight and credibility that readers give the review.

The Takeaway

In addition to the information set forth in the FTC’s guidance, businesses should be mindful of the most important takeaway in the wake of the Fashion Nova allegations: companies, especially retailers, should always publish all reviews and be sure to refrain from displaying them in a misleading manner.

This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.