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Scott Duke Kominers

For Better Online Product Reviews, Pay the Reviewers

A Chinese auction site lets merchants give rebates to customers who leave feedback. A new study shows that the system works.
Worth paying for.

Worth paying for.

Photo illustration by John Lund via Getty Images

Many online product reviews aren't especially helpful. Reviews can be manipulated, biased, or even intentionally ridiculous, so it's hard to judge their accuracy. The online review system also puts newer merchants at a disadvantage because they begin with no reviews at all. The Chinese auction site Taobao has an unusual solution to these problems: It lets merchants pay customers to leave detailed transaction feedback.

That's a risky-sounding strategy. Certainly, if merchants were allowed to reward customers for giving glowing reviews, the feedback system would quickly become uninformative. Likewise, allowing merchants to penalize negative reviews would lead to bias, as well as fiascos. It's already so easy to buy positive reviews that mischief-makers have been able to drive traffic to a nonexistent business. But Taobao’s system does not let merchants choose which customers to reward – it only lets them choose whether to reward them.