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There are really two issues around paying or otherwise financially incentivizing people for reviews.
From the legal angle, we're dealing with the Federal Trade Commission (FTC). It is not illegal to compensate someone for consumer reviews / endorsements. However, the key here is DISCLOSURE. The person making the review or endorsement MUST disclose on the review that they received some form of monetary or non-monetary compensation. And if the company paying for the reviews uses them on their site, social media, or other marketing efforts, they must disclose that the person making the review was compensated.
Here's an example where the FTC went after a company in Peachtree, GA for this very issue: https://www.ftc.gov/news-events/press-releases/2015/02/ftc-stops-automobile-shipment-broker-misrepresenting-online
The other angle is the policies of online search engines and business directories. Google, Facebook, Yelp and others all make it very clear that they do not tolerate consumer reviews that are compensated. Part of this is that THEY could get in trouble with the FTC, but the other part is that they want their own users to have a safe, trusted experience.
Here's an example of where Yelp specifically went after companies who compensated people for reviews: https://searchenginewatch.com/sew/news/2323483/yelp-ceo-confirms-sting-operations-to-clean-up-paid-reviews
Yelp Consumer Alert
Google and Facebook are just as aggressive. BTW, even contests that offer people a chance to win a "free" something or money off where the "cost of entry" is a review or rating is considered a violation of these guidelines.
Do YOU have a question about local digital marketing?
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