Does Yelp extortion exist? Does Yelp punish you for not advertising with them?
The answer is no. But you would be surprised at what some business owners noticed after they refused to advertise with the most popular review platform online to date, Yelp.
If you are a small business owner, it may come as no surprise that many other businesses are struggling to gain positive reviews on Yelp. Legend has it that unless you pay a monthly premium you may never receive 5-star positive reviews.
How true is this? Are extortion practices used by Yelp something small business owners need to worry about? Does Yelp really extort business owners to pull in more cash?
Yelp does charge a monthly premium and gives paying businesses a better chance at generating more positive reviews over another company that does not pay. Paid customers do indeed have a more pleasurable experience compared to free users.
But does this qualify as extortion? Let’s take a deeper look into Yelp’s history and past class action lawsuits they underwent with various small and midsize businesses.
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Infamous “Yelp Extortion Conspiracy” Theories
We are all familiar with the popular review platform known as “Yelp.” Yelp reviews have become an important part of online advertising, helping business owners to stand out against competitors.
Based in San Francisco, this mega-giant has made waves over the past decade, changing the way consumers buy products online, choose a restaurant for dinner or even find someone to help them with home services. Yalp has become extremely popular, helping millions of people share their experiences with local businesses.
Businesses and consultants that are listed on Yelp’s database are selected after consumers enter a keyword and a specific location. For example, tourists seeking dining destinations may search for restaurants near their hotel in a given city. Once these attributes are added, a Yelp rating and associated reviews written by Yelp users are displayed.
But how well does Yelp filter and sort the results? Is the number one plumber in your area actually the best or do they simply pay Yelp for better review visibility?
Countless small businesses have accused Yelp of extortion to the point of them nearly going out of business due to negative reviews. Does Yelp extort small businesses, rewarding only those that choose to play with the billion dollar bully?
To make matters worse, there is a section below every Yelp profile (most miss this) that is faded gray. It reads “other reviews that are not currently recommended.” What does this even mean? Does this mean a particular business features bad reviews?
After conducting a small case study and testing it with many local businesses, we have found that people who actually visit these locations and write a review may fall into the “not recommended” category. In other words, Yelp users — the people who the platform depends on for user reviews and ratings — may have little actual impact on ratings or review quality on the site itself.
Is This Theory Really True?
As peculiar as this sounds we wanted to give Yelp the benefit of the doubt. But after reviewing other case studies and talking to local businesses first hand we have come to a conclusion:
Yelp selects which reviews appear. They indeed manipulate reviews and that is no denying this.
Example A: their “not recommended” filter of (what Yelp considers) false or fake Yelp reviews. So even if you shop at a particular store or eat at a restaurant and then write a legitimate review, the odds are slim it will stick on the Yelp page associated with the establishment.
Unless, of course, you pay Yelp for a premium listing or pay for advertising.
Per a recent call with a representative at Yelp, we asked:
“How do we generate more reviews or more specifically how do reviews stick?”
Their answer was shocking:
“Well, if you pay for a premium listing on your profile we include all ‘not recommended’ star ratings into your total average.”
We immediately hung up. While there could have been more to their rant, that was a terrible way to start your answer to a question.
For a company that started out with honest intentions and a great online reputation management team, capable of delivering the best reviews and photos to local consumers, the tides are slowly shifting as now the company that pays the most will have the best reviews. While this may not legally be considered a tactic to extort local businesses, it is a shady and controversial practice that has received a lot of negative attention in recent years.
Yelp’s Defense Against Extortion Allegations
Of course, the only rebuttal or answers come directly from Yelp’s website where they claim time and time again that they do not have a “pay to play” business model. They claim all companies are treated equally. As we have seen in the sections above, the reality is far different.
After some simple research and reading other companies’ hardships, we know Yelp’s messaging to be false. And, it is creating a really serious reputation problem for the platform and its users.
We do not want to give credit to a Yelp blog in any sense, but there is an article from 2016 written by a Yelp employee working in Public Affairs that attempted to debunk this theory of extortion tactics.
This example involves a handyman who made a call to a Yelp representative in order to figure out how to increase his star ratings. Yelp went to the extent of flying that individual to their office to prove no threats were made.
By definition, extortion does not involve threatening anyone. It is similar to fraud, where an individual or business (in this case it would be Yelp) seeks monetary gain by depriving another individual of their livelihood (or his business).
He continued to ask why no reviews stick after he knows his clients left them. Yelp replied by saying the accounts were not credible and therefore did not qualify to be included in his overall star rating. In other words, all of the five star reviews the handyman’s customers had left were deemed by the Yelp filter to have come from people who did not actually use the handyman. Again, the billion dollar bully created falsehoods that caused economic harm to this small business owner.
The only answer Yelp gave was a call log showing 30-second calls. What is accomplished during that time? Odds are that it was a voicemail and not an actual conversation. Eight out of the 28 calls were longer than 30 seconds.
However, no calls on the log were longer than 7 minutes. Seems like they didn’t want to help after all. Is Yelp a legitimate service or not? If you are a local business owner, can you afford NOT to play Yelp’s game?
Yelp’s Extortion Lawsuits by Small Businesses
Dating back to 2014 there have been countless lawsuits filed against Yelp from business owners claiming extortion tactics were used. Yelp does an excellent job at protecting its brand reputation. This includes the use of aggressive Yelp sales recruiters, legal professionals, and crisis management teams.
However, many are trying to tarnish the company’s brand reputation.
Now we must note there are several cases where certain small business owners were indeed inflating their reviews by asking everyone on the planet to review them (friends, family members, or people just walking past on the sidewalk). In many cases, these fake Yelp reviews artificially inflated a company’s rating on the platform and potentially violated terms of service agreements with the review site.
We agree these accounts should be scrutinized. But who gets the final say whether a review is valid or not?
Maybe someone’s honest review was written because they liked the way the storefront looked or that it smelled amazing when they walked past. These factors are integral to good reviews on other platforms and represent legitimate claims. The real question regarding Yelp’s business practices is this: When is a review validated?
One of the lawsuits involved a local bistro that noticed a drop in star reviews after refusing to pay for advertising. In fact, many of the restaurant’s good reviews disappeared altogether after refusing to participate in the protection money scheme proposed by Yelp.
While it is understandable that once a company says no to you that you investigate their reviews, does this make Yelp’s practice of generating additional advertising revenue fall under the liability of extortion claims?
In refusing to pay, many reviews were then removed from their Yelp profile and pushed down to the bottom, into the dreaded “not recommended” zone. In essence, Yelp can manipulate ratings based on a business owner’s refusal to pay for advertising. From a restaurant marketing perspective, this negative shift in ratings can be devastating. Potential customers see these negative reviews and low star ratings, influencing their decisions on whether to visit a business or not.
This has been happening for some time now. Please watch the video below to better put this practice into perspective.
The Power of Yelp Reviews
Why are Yelp reviews so important in the modern digital environment? The simple fact is this: reviews influence purchasing decisions.
Positive Reviews
When a company gets positive reviews on Yelp or on other sites like Google reviews, this helps to built trust between the establishment and its potential customer base. People are far more likely to frequent a business that has good reviews and star ratings. Businesses that feature good reviews in their advertising tend to outperform companies with fewer or less flattering reviews.
Negative Reviews
Negative reviews, on the other hand, have the opposite effect. Negative reviews on Yelp or on other third-party review sites erode the trust that small business owners depend on to grow their operations. Bad reviews can convince potential patrons to choose one of your competitors, effectively reducing your revenue.
Negative Yelp reviews are especially burdensome due to the platform’s visibility in online search results. In fact, Yelp is often the first tool customers turn to when researching small businesses in their area. Yelp authored negative reviews have the potential to keep small businesses from expanding their customer base. The more bad reviews a company has, the less chance it has to reach new customers.
How Trustworthy Is Yelp?
Overall, Yelp is a fairly trustworthy site from a consumer’s perspective. Yelp does an excellent job at managing business listings and (for the most part) providing the most relevant information within a few clicks.
As a business owner Yelp can be tricky. Your trust will most likely increase after paying for a premium account as well as advertising space. As there will be increased visibility for your business and greater chance more positive reviews will “stick” and account towards your overall star reviews.
This is another reason many consumers think Yelp’s extortion tactics are real, regardless of any true findings within the legal system, including investigations by the Federal Trade Commission. Extortion claims have plagued the company nearly since its launch in 2014; continued practices by the review site have further threatened the platform’s online reputation.
Consider also Yelp’s company investors. Investors want a great return for their investment, driving Yelp to bring in more revenue by charging an advertising fee for every business wants to be featured on the platform. When millions — or billions — of dollars are involved, shady business practices may eventually lead to a lawsuit filed by unhappy investors who demand a larger ROI.
The best course of action would be for consumers to not rely on a single source or review site for reviews. There are hundreds of viable options online other than Yelp where consumer star reviews and ratings are reported.
Here is a shortlist of other review platforms similar to Yelp:
- Google My Business
- Amazon
- TripAdvisor
- Yellow Pages
- Better Business Bureau (BBB)
- And much more…
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Related Questions On the Yelp Theory
Has Yelp been charged with extortion tactics by the courts?
No, although many company owners stand behind how they feel. Yelp has never been charged with any extortionary tactics. Although they ride a fine line of what is acceptable they have never been charged. Although Yelp came close, there is only one case that stands out.
Click here to read an additional article from 2010 which involved a class-action lawsuit against Yelp in Southern California.
What type of businesses benefits the most from Yelp?
For the most part, small to medium-sized local businesses tend to benefit the most from Yelp. Granted, they pay for additional advertising that can help secure a spot on the first page of Google for restaurant reviews in your area.
Should you pay to advertise on Yelp?
If you have the budget for it, yes. For about $300 you can see great ROI on your investment. Paying for Yelp ads not only increases the probability someone sees your listing but it places your business at the top of the results.
This way, users are most likely to see your Yelp profile before a business that is not paying for advertising.
In conclusion, Yelp has never been found guilty of extorting business owners into “paying to play”. However, some of their business motives are unfavorable toward those who do not fork up the cash.
If you are in need of restoring your Yelp accounts to its former glory or simply looking to build your profile from the ground up, let NetReputation.com help you.
Please complete the Yalp form below and we will reach out within 24-hours with a list of options perfect for you and your business.
Final Thoughts on Yelp’s Advertising Services
In conclusion, Yelp has never been found guilty of extorting business owners into “paying to play”. However, some of their business motives are unfavorable toward those who do not pay fees for advertising or to be featured on the platform.
For any review site, forcing businesses into buying advertising as a way of ensuring favorable reviews is unethical at best. Third-party review sites should be places where real customers can share their real experiences, good or bad. These experiences are then reflected in the ratings a given business has.
Furthermore, is it really worth advertising on Yelp when great alternatives exist? Only owners of businesses can make that determination based on their business needs and goals.
Review Management by NetReputation
If you are in need of restoring your Yelp accounts to its former glory or simply looking to build your profile from the ground up, let NetReputation.com help you.
NetReputation is a leading online reputation management firm. We work closely with business owners who have put their trust in our review management services. If negative reviews are threatening economic harm, we can help. Our team can suppress negative reviews, flag fake reviews for removal, and help you create a review response strategy that builds trust between you and your customers.
Contact NetReputation Today
NetReputation is ready to help you with our comprehensive and results-driven services. Please complete the form below, and we will reach out within 24 hours with a list of options perfect for you and your business. If you prefer, 844-461-3632 for a free consultation with our review management professionals.