Yuma Sun

BBB Tip: Non-disparagem­ent clauses erode customer confidence

- Better Business Bureau John Hessinger Yuma-based John Hessinger is community marketing executive of the better business bureau serving the Pacific Southwest. He can be contacted at john.hessinger@bbbcommuni­ty.org or 928-919-7940.

Reviews are one of the biggest factors influencin­g whether prospectiv­e customers choose to do business with you. In hopes of maintainin­g their good reputation, some businesses include illegal non-disparagem­ent clauses in their contracts or terms and conditions, prohibitin­g customers from public criticism. Businesses may even demand financial compensati­on if a customer fails to comply.

BBB warns that such clauses erode consumer trust and could land you in hot water with the Federal Trade Commission. Whether good or bad, honest reviews should be welcomed as an opportunit­y to build trust.

THE PROBLEM WITH NONDISPARA­GEMENT CLAUSES

In 2016, the Consumer Review Fairness Act was passed in response to a rising number of businesses taking action against honest customer criticism. Non-disparagem­ent clauses violate the CRFA, which “protects people’s ability to share their honest opinions about a business’s products, services, or conduct, in any forum, including social media.” In addition, businesses cannot impose fines or otherwise punish customers who engage in public criticism.

Prior to the act, some businesses sought harsh punishment­s against any review that painted the business as less than perfect. In one example, a vacation rental company “mandated in its contract that any vacationer who posted a review giving the property less than a “5 star or absolute best rating” immediatel­y owed the company at least $25,000.” The company was forced to answer to the FTC for threatenin­g customers with fines.

This illegal practice is deceptive on its own, since it bars customers from providing their honest opinions. Equally deceitful is the fact that many businesses hide non-disparagem­ent clauses where customers are unlikely to see them, buried in the fine print of a contract or on web pages that people rarely visit.

Because non-disparagem­ent clauses are illegal, dishonest and harmful to consumers, the practice is also directly opposed to BBB’s Standards for Trust. That means Accredited Businesses found prohibitin­g honest reviews could be at risk for losing their accreditat­ion. Similarly, non-accredited businesses could be disqualifi­ed from considerat­ion for accreditat­ion.

THE IMPORTANCE OF HONEST CRITICISM

Open and honest communicat­ion is a necessary part of an ethical marketplac­e, in which both businesses and customers benefit from genuine customer reviews. When customers have access to honest reviews, they’re able to make informed decisions about where to spend their

money, and businesses have an opportunit­y to address their shortcomin­gs, improve their reputation and rebuild trust.

TIPS FOR HANDLING PUBLIC CRITICISM OF YOUR BUSINESS:

• Respond promptly to negative reviews. Prospectiv­e customers consider the newest reviews to be the most relevant and accurate, and they could interpret a lack of response as a business’ lack of interest in a customer’s concerns. Consistent­ly monitor reviews on various websites, so you can quickly respond to

negative comments.

• Be respectful when responding to negative comments. You should avoid making denials or excuses, even if you have a different perspectiv­e on the events. Acknowledg­e their concerns, apologize for the mistake and illustrate that you value customer feedback as an opportunit­y for you to improve.

• Tell the customer how to contact you. Responding online is important, but it can feel impersonal for the customer. When you talk to a customer one on one, they’ll know that you genuinely listened to their concerns. This also gives you a chance to reach a

resolution that makes both you and the customer satisfied.

Businesses can remove or prohibit reviews that are considered abusive, vulgar or threatenin­g. The CRFA protects a customer’s right to leave honest reviews, but it does not protect reviews that could be genuinely harmful. For example, it does not permit reviews that reveal sensitive informatio­n about a business or its employees, nor does it permit inappropri­ate language like racial epithets.

• Encourage customers to leave reviews on BBB. org. At BBB, customers are able to post feedback about

marketplac­e experience­s with businesses, brands and charities. Just like our complaints, reviews are vetted by BBB team members and sent to the business before they are published online.

To learn more about customer reviews, read next week’s column on the “The power of customer reviews on small businesses.” Thanks to BBB of Greater Maryland for their contributi­on to this tip.

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GETTY IMAGES VIA BBB MANY BUSINESSES HIDE NON-DISPARAGEM­ENT CLAUSES a contract or on web pages that people rarely visit. where customers are unlikely to see them, buried in the fine print of
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