Social media makes it easy for consumers to share their experiences on goods and services – positive and negative – with the whole world. To a smaller merchant, a single negative review could have a large impact on their business.

Those two forces are driving some smaller businesses to only offer reimbursements if the consumers promise not to post scathing online feedback. A recent CBC story detailed how a kitchen renovation merchant refused to reimburse an Ottawa couple for money owed unless the couple signed a legal contract that would prevent them from publishing negative online reviews.

Ironically, the couple had selected the merchant based on positive online reviews. But the length of the repairs and other complications led the firm to offer the couple $1,833 in reimbursement – but only if the couple agreed to sign a “non-disparagement” clause.

In a statement to the CBC, the merchant noted that “it only takes one false review to go viral to scare clients away and do permanent damage to a small business” and that “just like an individual’s reputation is important, the reputation of a small business is equally important and warrants protection.”

The story also noted that the merchant had an 86 per cent positive rating from HomeStars, the popular contractor review site. HomeStars CEO Nancy Peterson noted there should be no strings attached when it comes to getting a refund from a contractor. She also said that businesses do sometimes persuade clients to remove reviews from her site, but that ratings are lowered if many clients remove their review.

The entire story is an example of the limited reliability of online consumer reviews, the subject of a 2016 Consumers Council of Canada research report. Strengthening the Marketplace Through a Consumer Protection Framework for Consumer Online Reviews concluded that consumers rely on “gut feel” when judging the trustworthiness of individual consumer reviews. The report also noted that many online review sites contain numerous false reviews, created for many reasons: businesses seeking advantages, friends helping friends, employees supporting employers and consumers getting even.

The report noted that online consumer reviews are instructive, but not representative sources of information, as they tend to reflect polar experiences. “Consumers tend to write about extreme experiences (very good or very bad), but not unexceptional experiences.” The report concluded by counselling consumers to use reviews cautiously. “They can be a valuable resource, but consumers need well-developed critical skills to use them well. Relying on ‘gut feel’ to judge the authenticity of a consumer review doesn’t work.”

A followup CBC item indicated that the merchant eventually completed the reimbursement.