Consumer Reliance on Reviews: Impact and Risks
In recent years, a growing number of customers rely on reviews to help determine their purchasing decisions. However, it’s crucial to consider the significant risks and impact of employee reviews on employers.
Employer Initiatives and Encouragement of Staff Feedback
In response to this trend, many employers have asked (and in some cases ordered) their staff to take a few moments and head online to Google, Yelp, and other popular review sites to share a few positive and encouraging words about their products and services. It’s fast. It’s free. It might even prove enjoyable, especially compared to some typical day-to-day work tasks.
Legal Considerations and Regulatory Alerts on Employee Testimonials
But that’s not all. It may also be against the rules.
In January, the Competition Bureau of Canada issued a stark warning to businesses to watch out for reviews posted by their employees — at the organization’s behest, or independently of their own accord — that fail to properly disclose their relationship.
Disclosure Requirements for Employee Feedback
Reads the bulletin: “When posting online reviews about their company or its competitors, employees must disclose all connections they have with the business, product or service they promote, even if they’re providing their honest opinion. These connections have the potential to affect how consumers evaluate the reviewer’s independence. This applies to all types of reviews, including testimonials on social media.”
Training and Adherence to Disclosure Rules for Employee Comments
To ensure that online reviews do not backfire, the Bureau recommends that businesses train all employees to correctly disclose their business connection, and further ensure that this disclosure is clearly visible in the review itself. If this is not possible (i.e., if the review site only has a star-rating system and there is no option to enter comments), then the Bureau says that employees should not post a review.
Examples and Challenges in Ensuring Compliance with Employee Feedback
For example, an employee working in a bakery may truly believe that their company’s bread is outstanding. What’s more, that same employee may have ample feedback from customers, family, and friends that the bread is great. However, if an individual cannot state in a review that they are an employee—and, to fully comply, also disclose their role and duration of employment—then they should refrain from leaving a review. This may seem unfair and extreme at first glance, but the Bureau emphasizes the importance of avoiding bias and conflicts of interest, given the significant influence of customer reviews.
Impact of Employee Reviews on Consumer Decisions-Making
“Online reviews often strike at the heart of a consumer’s buying decision,” commented Matthew Boswell, Commissioner of Competition. “Shoppers trust that reviews are from real unbiased customers, just like them. When employees post reviews without disclosing their relationship with the business, consumers are misled. We will not hesitate to vigorously pursue enforcement action against problematic reviews.”
Legal Ramifications for Non-compliance with Staff Feedback Regulations
Generally, the deceptive marketing practices provisions of Canada’s Competition Act apply to anyone who promotes a product, service, or any business interest. Those who break the rules may face significant penalties equivalent to three times the value of the benefit derived from the illicit conduct. The maximum penalty for an individual is currently set at $750,000, and for a corporation it is $10,000,000 for each order.
SOURSE:
Online – reviews posted by employees: businesses could be liable
Justice Laws – Competition Act
