Is Groupon Asking Merchants to Write Fake Yelp Reviews? (Updated)

In a post on his blog Venture Level today, entrepreneur Romil Patel describes his experiences with running Groupon and LivingSocial deals. Overall, his experience with Groupon was not exactly positive, but what struck me while reading his account was that the Groupon representative he worked with asked him to create positive Yelp reviews for his own business.

Here is the relevant part from the post:

Later on, after the terms were accepted by me, my rep emails me and asks me to create Yelp reviews for my QSR [quick service restaurant], by having either my employees write how good my QSR is or having my “best” customers write them. I’m not too sure, but I’m confident this has to be against Yelp’s terms of service since this would be considered creating fake and biased reviews. Needless to say- I thought this was an ethics issue, and I didn’t do it.

Indeed, self-reviews are obviously against Yelp’s terms of service and rather unethical. It is striking that a Groupon representative would ask merchants to do this in the first place. Groupon often features excerpts from positive Yelp reviews when it advertises deals and this behavior immediately renders all of these reviews suspect.

It is hard to say if this is something other Groupon representatives do as well, or if this representative just went rogue. As Patel himself notes, maybe the Groupon representative he dealt with was just not up to par (he had numerous other issues with him as well).

I have asked Groupon for a statement and will update this post once I hear back.

Update (4/22 12:40pm PT): A Groupon spokesperson responded with the following statement:

We never ask merchants to falsify online reviews with those from their best customers or employees. We do use sites like Yelp and Citysearch to provide credible third-party reviews of the merchants we feature; if a merchant doesn’t have any, it’s difficult for us to run them because our customers expect that third-party approval. We will note this to the merchant and encourage them to ask *all* customers to post Yelp reviews, positive or negative. We’re much more likely to run a deal when we know our subscribers can make an educated purchase.