ADVERTISEMENT
	Tech Brew Join the over 400K people reading Tech Brew – the free 3x/week email delivering the latest updates on the technology changing the business world. Check it and start getting smarter today! Try it!

LEGAL BRIEF

By Max Stul Oppenheimer, Esq. • Comment about this article

Today’s online shopping technology cannot quite match the in-person, brick-and-mortar experience.

Multiple photos, detailed descriptions, and videos can go a long way toward helping purchasers compare products and pick the one that fits their needs, but current technology can’t really replace the ability to try on clothes, shake a product for loose parts, or check the bytes on a flash drive to make sure they match your color scheme.

Online shoppers have had two tools that help close the gap: the availability of free returns and online reviews by other purchasers.

In late 2022, the Washington Post reported data indicating that “Americans returned 47 percent of their online purchases” that year, and:

More than half of the shoppers believe retailers should cover the cost of returns while 62 percent said they will shop elsewhere if they have a poor return experience and a similar share, 63 percent, said free return shipping is their top consideration when making an online purchase.

Yet that same article sounded the alarm that the era of unlimited free returns was in jeopardy, declaring “The age of free online returns is ending” and listing a dozen retailers that were initiating fees for returns of online purchases.

In April 2023, Forbes reported similar findings based on 2021 data:

Of all online purchases, nearly 21% are returned…..one survey finding that 84% of consumers say the return experience is important in forming their opinion of the retailer. Seventy-nine percent of consumers say free returns are an important consideration when shopping online. Stores with stronger return policies tend to have more loyal customers, and people tend to spend more at brands that offer free returns.

Yet Forbes noted reports that Amazon was imposing a small return fee for purchases returned by UPS when a Whole Foods, Amazon Fresh, or Kohl’s location was nearby.

On December 26, 2023, CNN reported that ”Eighty-one precent [sic] of merchants are now charging a fee for at least some methods of returns.”

The offer of free returns of online purchases is a powerful statement of
a retailer’s confidence in the quality of goods and a powerful assurance of satisfaction with the purchase. If that disappears, online shoppers need something to replace it.

The opinion of a trusted friend or colleague (especially one who shares your taste and values regarding a specific purchase) is another powerful assurance of satisfaction with a purchase. Though the opinion of a random stranger would not be of much value, the honest opinion of thousands of them would be.

The critical word is “honest.” Unfortunately, merchants have an incentive to encourage dishonest reviews — either favorable reviews of their products or unfavorable reviews of their competitors’ products.

According to the Better Business Bureau:

Shoppers depend on customer reviews to make the right decisions. They are also a determining factor in ranking algorithms and can lead to better visibility and more sales. It’s no surprise that dishonest sellers often post fake reviews.

Several sources provide helpful hints for detecting fake reviews. For example, the Better Business Bureau offers this advice:

Despite e-commerce websites’ best attempts, getting rid of every fake review quickly is nearly impossible. As a consumer, the key is knowing when to pass on a product by recognizing red flags in phony reviews.

Unfortunately, its “Easy Ways to Recognize Fake Reviews” are easily circumvented by determined fake reviewers, even more so if aided by commonly available artificial-intelligence generative tools. For example, the BBB advises “If a reviewer has a very common or generic name, such as John Smith or Jane Doe, you’ve spotted a red flag. … Check the grammar and spelling. … Look at the quantity of reviews… .”

Trustpilot, a website that evaluates the reliability of reviews, reports:

The truth is, the average human finds it difficult to decipher what is true and what is false. In fact, research of 25,000 people shows we are only 54% accurate when asked if a person is lying to our faces and when looking specifically at reviews, only 57% of people were able to accurately find a fake review, just by looking at the content. This slightly improves to 65% in tests where the participants were provided with more information about the reviewers.

Trustpilot’s business model is based on being expert at finding fake reviews, so the subtext might be “Use our service.” But it seems quite believable that spotting well-designed fake reviews is about an even bet, and there are no shortcuts to spotting them.

The federal government is aware of the problem and has been working on solutions through the Federal Trade Commission, the agency charged with maintaining honesty and fairness in consumer markets.

Protecting consumers against fake reviews is complicated by at least five factors:

The FTC has started that process.

On October 20, 2022, the Federal Trade Commission opened Commission File No. P214504 with the immortal words “Online shopping runs on reviews.” [OK. Maybe not up there with “Give me liberty”, or “All Gaul is divided into three parts” but not bad: direct, to the point, and — dare I say — poetic.]

A journey of a thousand miles begins with an Advance Notice of Proposed Rulemaking, at least it does if you are a federal agency. The FTC published that notice in November 2022, beginning the process that would come to be known to its close friends as FTC-2023-0047. Of particular concern to the FTC, official guardian of consumers in the federal galaxy of administrative agencies, were:

In response to the Notice, the FTC received 42 comments and decided they provided enough information and context to proceed directly to a proposed rule rather than conduct further outreach.

The FTC summary of the comments is several pages long, but here’s a summary of the summary: Twenty-nine comments supported proceeding; four thought it “unnecessary, premature, or should not apply to the commenter’s constituents.”

Of greatest interest, five review platforms submitted comments: Yelp, Trustpilot, Google, Tripadvisor, and Amazon. In general, they thought reviews were important, and they wrote of the lengths to which they go to stop and combat fake reviews.

Of the comments from “entities dedicated to fighting fake reviews,” the Transparency Company said that its research suggests that the major review websites are unable to detect a majority of fake reviews online. It estimated that 8.5 percent of published reviews are fake, including 10.7 percent of Google reviews, 7.1 percent of Yelp reviews, and 5.2 percent of Tripadvisor reviews.

Seven trade associations submitted comments. One, the National Automobile Dealers Association, thought rulemaking unnecessary because the Commission had not identified any harmful market conduct for which remedies do not exist under current law.

The Commission decided it had heard enough. I will spare you the cost/benefit math, except to note that in calculating the value of your time, the Commission thinks $22.97/hour is about right. Using that figure, it believes its regulations will save $3,970,149,909 a year (I would have rounded to $3,970,149,910, but it’s reassuring that the FTC can compute with such precision). And it will cost businesses a mere $826,310,000 to comply with the new rule.

On July 31, 2023, the FTC published its proposed rule for public comment; on January 16, 2024, it set a hearing on the rule for February 13, 2024. Three groups testified, with unsurprising positions: Fake Review Watch, the Interactive Advertising Bureau, and a group of academic researchers. The Commission is now considering the testimony and drafting the final rules that will govern online reviews — at least until the inevitable litigation challenging those rules begins.

Help is on the way, but it may be a while before it gets here. In the meantime, the best available tools are awareness of the issue (as Abraham Lincoln said, “You can’t trust everything you see on the Internet” — not mine, and I’d give credit to the original author if I knew who it was) and consideration of a vendor’s return policy.

Consumers may not be able to stop the trend away from free returns, but they can certainly take the potential cost of returns into account when comparing vendors and making purchasing decisions.

Finally, using a credit card (rather than a debit card) provides a level of protection against charges for mis-described or defective goods, if not against indirect costs such as the time and money to return the goods.

And remember AskWoody: Greatest source for unbiased information! Incredible bargain! I couldn’t believe how good it is for the price! Bought several subscriptions for friends and colleagues, and they are ecstatic! I’d give it a gazillion stars if I could.

It’s on the Internet. It must be true.

Join the conversation! Your questions, comments, and feedback about this topic are always welcome in our forums!

Max Stul Oppenheimer is a tenured full professor at the University of Baltimore School of Law, where he teaches business and intellectual property law. He is a registered patent attorney licensed to practice law in Maryland and DC. Any opinions expressed in this article are his and are not intended as legal advice.

ADVERTISEMENT

Enjoying the newsletter? Become a PLUS member and get it all!
	Don’t miss any of our great content about Windows, Microsoft, Office, 365, PCs, hardware, software, privacy, security, safety, useful and safe freeware, important news, analysis, and Susan Bradley’s popular and sought-after patch advice. PLUS, these exclusive benefits: Every article, delivered to your inbox Four bonus issues per year, with original content MS-DEFCON Alerts, delivered to your inbox MS-DEFCON Alerts available via TEXT message Special Plus Alerts, delivered to your inbox Access to the complete archive of nearly two decades of newsletters Identification as a Plus member in our popular forums No ads We’re supported by donations — choose any amount of $6 or more for a one-year membership.