Last year, Prose – a company that makes customized haircare products – brought an NAD challenge against a competitor, Function, over Function’s claims that it had over 110,000 5-star product reviews. Shortly after that, Function filed a challenge against Prose over Prose’s claims that it had over 192,000 5-star product reviews. (You can read about those cases here and here.) NAD recently reopened the second challenge, and the new decision includes additional insights into how NAD examines reviews.
When a consumer buys a product from Prose, the company solicits star-ratings on various aspects of the customer’s experience after each purchase. Prose may then revise a formulation after receiving feedback. The iterative process of reviewing and refining happens every time a customer orders, and the customer can rate every iteration. In the original case, NAD recommended that Prose more clearly disclose that its 192,000 5-star product reviews claim was based on its “Review and Refine” process.
In the new decision, NAD looked at how Prose solicits ratings and discloses how the rating process works. NAD determined that Prose solicited ratings in a neutral manner, that it had proper controls to ensure reliability, and that its survey was properly designed. However, NAD recommended that Prose better disclose how the “Review and Refine” process works. Although the details were presented on the Review page, they weren’t presented in other places Prose made its 5-star claim.
NAD also examined Prose’s practice of including only 4- and 5-star reviews on its site. In doing so, NAD looked to the FTC’s recent guidance on “Featuring Online Customer Reviews.” (You can read more about that here.) NAD noted that “the context in which reviews are displayed should indicate whether the webpage features positive reviews as testimonials from satisfied customers, or acts as a platform publishing all collected reviews.”
The headline on the Reviews page touts “Featured Reviews and Ratings From Reviews & Refine,” and although the page mentions “225K 5-star reviews,” only a few are actually displayed. NAD found that this would lead reasonable consumers to understand that the posted reviews are highlighted as testimonials from happy customers, and not a display of all reviews. Because Prose was able to demonstrate that the highlighted reviews were typical, NAD found that the presentation was not misleading.
As reviews play a greater role in consumers’ purchasing decisions, companies are employing new strategies to solicit reviews and make claims based on those reviews. At the same time, many of those companies are also carefully watching what their competitors are doing and bringing challenges when they think those competitors go too far. With the FTC also listing this as an enforcement priority, we expect to see more challenges in the coming year.