Online review sites can either help a business grow and expand or doom it to bankruptcy.
Millions of people use Yelp, Google, and Facebook every month to share an experience they had with a business or read about other people’s experiences with a business. For consumers, these platforms are helpful because it helps them weed out options that would not give them the quality of the products and services they expect.
For businesses, it can be a nightmare.
What a Bad Review Can Do to a Business
A bad review can ruin the reputation of a business forever. It can turn potential customers away and cause a company to close its doors permanently.
The effects of a bad review are even more apparent among small to medium enterprises. Because these ventures do not have a budget for marketing, they rely on word of mouth, in this case, online, to gain the public’s trust.
That is why it can be tempting to hit back to reviewers who leave a scathing review about a business. However, before an entrepreneur calls a business lawyer, should they sue over a bad review online?
Real-World Consequences of Online Reviews
Yelp is a website that works solely as a space for consumers to rate and review businesses they have had transactions with. However, Google and Facebook have rapidly become essential platforms for consumers.
Google, in particular, has a considerable influence on a business’ reputation. About 90% of web searches across the world are done on Google. When a consumer makes a web search, they are presented with information about the business and customer reviews.
In fact, in one study, researchers found that small to medium enterprises with low scores on Google received 30% less revenue on average per year. In comparison, businesses that receive low reviews on Yelp receive 19% less revenue year after year. If the company gets a low average on Facebook, it may get 9% less revenue yearly.
All three online review sites platforms are integral to a customer’s decision to push through with a purchase. In a survey conducted by BrightLocal in 2017, 93% of respondents said that they read reviews before they go shopping. In another survey, this time by ReviewTrackers, 94% of respondents said they avoid businesses with overwhelmingly bad reviews.
Is it Defamation?
Even if the business does not have profiles on social media, its success will be significantly affected by what people say about it online. That is why entrepreneurs are taking it so seriously that some of them are willing to bring customers to the court over negative feedback.
In 2009, for example, a plastic surgeon sued three of his clients over reviews on Yelp and CitySearch. The clients — all women — said that the plastic surgeon was “dangerous,” “ruthless,” “horrible,” and a “liar.” In the end, the lawsuits were voluntarily dismissed.
Under the First Amendment, consumers are free to express their opinions over the experience they had with a business. Having a bad review online, therefore, is not a good reason to take legal action. A company can try to sue, but it will unlikely win the case.
It is, however, a different story if the customer starts making factually incorrect claims. The case is viable if the business can prove that the comments that a customer made is false.
For example, if a review claims that a member of the staff committed theft against a customer when, in fact, the security footage proves that nothing sinister happened within the store or a restaurant, the business may be able to sue.
The false statement should be made to third parties. That means that the bad review should be published on a blog, on an internet forum, a newspaper, a magazine, etc. Defamatory claims made to third parties verbally can also be included in the lawsuit.
The plaintiff, the business owner, can request for damages. The business owner can get compensation for the loss of customers and, therefore, income due to damaged reputation directly caused by the false statement made by the defendant.
However, make sure that, before you file a lawsuit over a bad review, you are not infringing on the customer’s rights. 29 states across the U.S. have anti-SLAPP (strategic lawsuit against public participation) statutes, which makes it easier for defendants to dismiss meritless lawsuits. In some places, plaintiffs will have to pay fines after an anti-SLAPP motion.
It is going to be costly to sue a customer who leaves a bad review. It may also not repair a ruined reputation. While bad reviews have negative consequences, in most cases, a lawsuit is not the answer.