Do you ever review products on your website?
Do you ever send out free products in exchange for reviews?
If the answer to either of those questions is yes, keep reading. Without the right product review disclaimers, you could end up misleading your readers and potential customers.
Even worse, you could be breaking the law.
Simply put, a disclaimer is a formal statement that you are not legally responsible for something.
For example, when you park your car at the grocery store, there may be a sign in the lot that says "Store is not responsible for damage caused by shopping carts."
After all, the store can't control what every single shopper does out in the parking lot. If someone decides to ram his shopping cart into the side of your car, you can't take legal action against the store. At least, that's what the store's lawyers would say if you tried.
So, how does a disclaimer affect your product reviews?
If you received a product for free in exchange for your review, you need to make that clear to your readers. That way, they'll understand the relationship between you and the company that sells the product.
If you've ever spent any time shopping on Amazon, you've probably seen countless product review disclaimers -- at least, you used to.
Amazon used to have strict rules regarding product review disclaimers. Reviewers were never allowed to receive money for their reviews, but they were allowed to review products that had been given to them for free or at a discounted price -- as long as they put a disclaimer in their review that explained how they received the product:
In 2016, the team at ReviewMeta decided to study 7 million Amazon reviews. Their findings? Reviewers who had received a free or discounted product -- or "incentivized reviewers" as Amazon and ReviewMeta call them -- were much more likely to write a positive review.
Here's how the numbers add up:
Furthermore, the study showed that incentivized reviewers were 12 times less likely to give a 1-star review. When it came to negative reviews in general, incentivized reviewers were 4 times less likely to be critical.
In October 2016, Amazon banned all incentivized reviews because consumers were losing trust in the review system and it affected their purchasing habits. The retail giant deleted more than 500,000 reviews and even went so far as to sue businesses that had paid for reviews and reviewers who had accepted payments.
The only exception to Amazon's ban is authors who give out free or discounted advance copies of their books in exchange for reviews. If you're one of those authors, you can keep your Advance Review Team, but you're required to tell them to include a short disclaimer in their reviews.
Amazon isn't the only one cracking down on product reviews, though. In some cases, product review disclaimers are the law of the land.
Here's a quick look at some laws on disclaimers from around the world.
The Federal Trade Commission (FTC) is America's consumer protection agency, so it's responsible for enforcing product review disclaimer violations.
Specifically, the FTC's Endorsement Guides says that if there is a "material" connection between a reviewer and a product manufacturer, there needs to be a clear disclaimer that describes the connection. That could mean receiving the product for free, getting paid to write the review, or having a business or personal relationship with the manufacturer.
In 2017, the FTC sent letters to nearly 100 influencers like celebrities and athletes who review and endorse products on their social media accounts and reminded them to clearly disclose the relationship between them and the brand.
The FTC requires those disclaimers to be conspicuous so that social media followers can't help but see them. Including a disclaimer in a long string of hashtags likely isn't going to be considered conspicuous enough for the FTC.
Would YOU be able to pick out a disclaimer in the list below? Probably not. Odds are your eyes are going to glaze right over this mishmash of hashtags:
While the Endorsement Guides aren't a list of laws, the FTC does have legal authority under the FTC Act. Section 5 prohibits deceptive advertising and grants the FTC power to investigate reviewers and the companies that pay them.
Here's how the FTC defines "deceptive practices":
After investigating, the FTC can force defendants to give up any money they received, and the agency can impose stricter requirements for defendants to adhere to in the future. Contrary to popular belief, there are no fines imposed for violating the FTC Act.
Consumer protection laws, including those related to product reviews, are enforced by the Competition and Markets Authority (CMA). The CMA took over in 2014 after the Office of Fair Trading (OFT) closed.
One of the CMA's first official acts was to investigate online reviews, how they were being abused, and how the abuse was affected UK consumers.
The CMA also studied buyers' habits after reading product reviews. According to their research, product reviews play a role in £23.3 billion worth of purchases:
Among other things, the Consumer Protection from Unfair Trading Regulations of 2008 prohibit misleading commercial practices, such as leaving out important information or presenting deceptive messages to consumers.
There are 31 specific practices named in these regulations, one of which is publishing paid promotional content without disclosing that it was paid for. As a result, people and companies who don't have the proper product review disclaimers in place can face both civil and criminal penalties.
In Canada, legal experts use the term "Astroturfing" to describe commercial representations that are designed to look like legitimate customer experiences. Astroturf is a synthetic sports surface that's designed to look like real grass.
In Canada, if you post a review that's anything but impartial and authentic, you're Astroturfing. Not including a product review disclaimer will likely be considered Astroturfing.
What's the penalty?
You've just violated The Competition Act, which is a federal law that was created to encourage legitimate competition between Canadian businesses. Similar to US antitrust laws, The Competition Act makes it illegal for businesses to use anti-competitive tactics (like Astroturfing) to gain a dominant position in the marketplace.
This law has both criminal and civil provisions, so if you violate it, you don't just have to worry about a fine. You could face up to 14 years in prison.
The Competition Bureau, the organization responsible for enforcing The Competition Act, suggests that Canadian business owners create a compliance program that teaches their employees all about the Act and how to follow it.
The Australian Competition and Consumer Commission (ACCC) enforces all laws that have to do with business competition and fair trading, including those surrounding fake or misleading product reviews.
If you're a reviewer who received some kind of financial or non-financial benefit and you don't disclose it, you're in violation of the Competition and Consumer Act of 2010 (CCA). If you're a business owner who uses incentives to try and get favorable product reviews, you're also in violation of the CCA.
As a result, you could face fines in both civil and criminal court.
How big are those fines?
For individuals, fines for violating the CCA can be as high as $500,000. For corporations, you may have to pay as much as $10 million. If the court can determine how much money you made as a result of your violation, you may have to pay three times that amount. Or, if the court can't determine an actual amount, you could be fined up to 10% of your annual turnover in the past 12 months.
One more thing for business owners to note: Businesses that don't know about product review disclaimer violations can still be held legally liable for them.
While we've talked about free and discounted products given to reviewers, there's one more type of product to discuss: affiliate products.
If you're an affiliate for a certain product (meaning that you market the product and then make a small commission when someone purchases it as a result of your efforts) you need to disclose that.
If you're in the US, the FTC requires you to have a clear and conspicuous disclaimer that explains your relationship to the product. Even if you're not actually reviewing the product, you still have to include a disclaimer.
You'll also have to follow the guidelines set out by your affiliate program.
For example, if you're an Amazon affiliate, Amazon requires in its Amazon Associates Program Operating Agreement that you have certain language on your website:
If you don't follow this disclaimer rule, you could lose all of your commissions and be removed from Amazon's affiliate program.
Different programs have different rules, so be sure to read all of the fine print carefully before you start promoting products.
For starters, it has to include the details of how you received the product. If you got the product for free, for a discount, or because you're an affiliate, tell your readers.
It's also a good idea to use some positive descriptions of your honesty.
For example, tell your readers that you were given a free product in exchange for your honest and unbiased review. Simply using the words "honest" and "unbiased" can help your readers take your review more seriously. The last thing you want is for them to think you're willing to say anything to whoever gives you a quick buck.
While you're not required to put your disclaimer in any particular spot, it does need to be conspicuous and not hidden. Most reviewers include them at the end of the review. Why? Reviewers tend to think that readers won't take their opinions seriously if the first thing they see is that the product was given to them for free or for some incentive.
If you do a lot of paid product reviews, there should be a disclaimer on each one of them. If you simply have one disclaimer page on your website, most readers won't find it, which means they won't know what kind of relationship you have with the product seller in question.
Also make sure that your product review disclaimer is easy to understand. This isn't the time to bust out the complicated legal jargon. If your readers don't understand the disclaimer, it won't do you any good.
For example, the following disclaimer is unclear and unspecific. Would YOU understand it if you saw this on a website?
Because they "may" receive consideration for their reviews, you don't know which ones are incentivized and which ones aren't.
And what exactly do they mean by "consideration?" They say that they "do not accept paid reviews," so what kind of consideration are they getting? Since you don't have the full story, you probably won't be as willing to trust this website as you would be if there was a clear disclaimer on every product review.
And finally, consider including a product review disclaimer on every review you post, whether it was paid or not.
Unlike the example above, saying something like, "I have no affiliation or relationship with the supplier of this product" makes it clear to your readers that you went out, bought the product at full price, and decided to share your thoughts.
What if you run a website that receives money from the makers of the products you review?
There are professional review websites out there that will take payment from a company in exchange for reviewing a product. If this is what you do, you have to word your disclaimer very carefully. You want to make it clear that you're not in the business of writing puff pieces.
Your readers need to know that they're getting the full, accurate story from you, in spite of the payment you received for your review.
Here's a great way to sum all of that up:
Remember, whether you're a product manufacturer or a reviewer, the goal is for people to trust what you're saying. The right product review disclaimers are an easy -- and legal -- way to do just that.