Amazon has a problem with fake reviews — here's how holiday shoppers can avoid falling for them

Key Points
  • Online shoppers look to reviews to make an informed purchase decision, but some third-party sellers are buying fake reviews to improve their search results.
  • To outwit Amazon's fraud detection, shady merchants have become increasingly sophisticated, using Facebook groups and Reddit posts to find reviewers.
  • Amazon fans can avoid being swindled by using websites like ReviewMeta or FakeSpot for estimates on the trustworthiness of a product's reviews.
Amazon employees load boxes with orders at the company's fulfillment center ahead of Cyber Monday in Tracy, Calif.
David Paul Morris | Bloomberg | Getty Images

Buyer, beware — that last-minute stocking stuffer from Amazon may not have earned its five-star rating legitimately.

Amid the explosion of e-commerce, shoppers are turning to online reviews instead of ads to decide what to buy. Fifty-five percent of people always use online ratings and reviews to inform their purchase decisions, according to a Better Business Bureau and Nielsen survey.

But sometimes those reviews are bought and paid for, just like advertising.

"The reality is with certain categories of product, buying out fake reviews is actually considered a marketing expense," said Renee DiResta, director of research for cybersecurity firm New Knowledge.

The dominant e-commerce platform remains Amazon, which sells hundreds of millions of products, with more than half of items sold coming from third-party sellers. Shares of the e-commerce giant are up 40 percent this year, and the company's market valuation briefly reached $1 trillion in September.

Top-rated products show up higher in search results on Amazon's website and Google, which can mean a significant boost in sales for a seller with a top-rated listing.

Some merchants have turned to paying for positive reviews, especially ahead of major shopping days for Amazon, like Black Friday. And Amazon has struggled to catch them as they grow increasingly sophisticated in evading notice from the website and customers.

DiResta's research found that the most likely offenders are sellers of generic products from no-name companies.

Amazon fans can look to websites like ReviewMeta or FakeSpot for estimates on how trustworthy a product's reviews are. Both have their own Google Chrome extensions to make checking reviews even easier.

FakeSpot gives Amazon products a grade based on how trustworthy its reviews appear to an algorithm. The website also grades reviews from TripAdvisor, Yelp and Walmart.

ReviewMeta takes a different approach. Running an Amazon URL through the website generates a report with an overall grade, as well as an adjusted rating that removes reviews it deems "unnatural."

A low grade from ReviewMeta or FakeSpot does not necessarily mean that the program captured every fake review. In some cases, legitimate reviews may be flagged or fake reviews could be missed.

To combat the problem, Amazon deletes reviews, products and even the accounts of suspect sellers and fake reviewers.

"We take this responsibility very seriously and defend the integrity of reviews by taking aggressive action to prevent abuse and protect customers from dishonest parties who are abusing the reviews system," Amazon said in a statement to CNBC. "Customers can report suspicious reviews 24 hours a day, 7 days a week and we investigate each claim."

In some cases, the e-commerce giant has used the legal system to curb the problem. It sued more than 1,000 people who used the freelancing platform Fiverr to find sellers willing to compensate them for reviews. Amazon has also filed suits against several third-party sellers.

DiResta discovered that sellers search for reviewers looking for free products and even extra cash in Facebook groups and Reddit posts. Merchants usually request to see the reviewer's Amazon profile to make sure it appears legitimate, which usually means a profile picture and experience writing reviews spread out over a long span of time.

To avoid fraud detection, sellers would send DiResta a photo of their product, leaving her to track it down on Amazon. Some might even ask reviewers to leave the item on their wish list for a day or two to remain under the radar, she said.

Sellers also provide a discount code to reviewers, allowing them to purchase the product without paying. Because they bought it through Amazon, their post about the product will appear with a badge that says "verified purchase," adding a sense of legitimacy to the review. DiResta also noted that many sellers requested reviewers to post photos of the product with the review.

ReviewMeta and FakeSpot still recommend reading over the reviews — with a few tips in mind.

One sign that potential buyers should look for is overly positive language that praises the company, FakeSpot CEO Saoud Khalifah said.

Khalifah also suggests looking at the dates of a product's reviews. A large number in a few days is a red flag. Another warning signal is multiple posts from a reviewer for different products in a single day, he said.

Tommy Noonan, who operates ReviewMeta, says when you believe you have been fooled, you should message the seller and Amazon and consider returning the product.

Noonan warns that nobody can tell definitively what a fake review is, and even a listing with inauthentic reviews might still sell a product that works.

"Any seller that has any long-term goals in mind is going to try to provide a quality product and quality customer service," he said.

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