How to Win Back Trust After a Negative Online Review

Online shopping received a huge boost during the COVID-19 pandemic, as consumers battled to obtain scarce goods, while obeying social distancing regulations. The share of global retail sales met through e-commerce rose from 16 percent to 19 percent in 2020 alone, according to UNCTAD, the UN’s trade and development body.

However, as the e-commerce market has grown, so too have concerns about deceptive or manipulative design features in online shopping sites – known as “dark patterns” – that seek to steer consumers into making decisions that may not be in their best interests.

Countdown clocks; free trials that lead to hidden subscriptions; drip pricing with extra fees added at the point of sale; and false time-limits for discounts; are among tactics used by online vendors that have prompted a rash of negative reviews in online forums.  Besides, mis-ascribed problems caused by other reasons, such as a delay in order fulfilment due to poor planning, are often reported in online reviews and ascribed to the seller’s integrity issue. Moreover, sometimes customers forget to cancel free trials and are charged for subscriptions, but they may also wrongly attribute this to sellers’ integrity-based violations like hidden subscriptions.

“Earlier studies have shown that accepting responsibility is an effective way to demonstrate sincerity in restoring a broken relationship and that such sincerity is critical to repairing trust.”

Prof. Wang Weiquan

Such reviews often criticise a vendor’s integrity for violating consumer trust and are easily accessed by potential future customers. They can have a devastating impact on a vendor’s business by reducing potential customer’s trust in – and willingness to transact with – the firm.

However, a new study by Wang Weiquan, Professor at the Department of Decision Sciences and Managerial Economics at the Chinese University of Hong Kong (CUHK) Business School, reveals a unique formula for repairing customers’ trust in an online vendor following negative postings in forums about alleged deceptions on the seller’s website. The guidance, which is specific to e-commerce settings, is based on empirical evidence set out in the study.

Entitled Repairing Integrity-Based Trust Violations in Ascription Disputes for Potential E-Commerce Customers, the study was conducted by Prof. Wang, in collaboration with Prof. Kai H Lim of Hong Kong Polytechnic University, and  Prof. Honglin Deng of Tongji University.

Traditional Remedies Ineffective in Online Settings

It is believed to be one of the first studies ever to examine repair strategies for disputed trust violations in the online marketplace.

The researchers propose a two-stage model for repairing trust in an online seller among potential customers who are reading for the first time a negative online review that accuses the vendor of an “integrity-based trust violation”.

Such accusations blame the incident on the honesty, morality, truthfulness and consistency of the seller’s character, and therefore can be highly damaging, while traditional remedies – such as an apology or denial – may prove inadequate.

“Apologies have been shown to be ineffective in repairing integrity-based trust violations, because they suggest that the perpetrator is admitting to a lack of integrity, leading to concerns that they will deceive customers again in future,” says Prof.Wang.

Moreover, in an online setting, the risks are magnified because large numbers of potential customers are exposed to such complaints, while the recurrent face-to-face interactions between customer and seller that may take place in a physical shop, where pledges to improve performance can be checked by the victim, are lacking, the paper states.

Re-Ascribe the Violation to Non-Integrity-Based Factors

“As distinct from the traditional approach in which the vendor denies the violation itself, following our model, they will accept responsibility for the violation but reject the accusation that it is due to their integrity,” says Prof.Wang. “They will then re-ascribe the violation to a lack of competence or benevolence, before pledging to address such shortcomings and not to let such an incident happen again.”

The model is based on prior studies that show integrity is widely perceived as an unchanging characteristic, while competence and benevolence are qualities that can be improved through learning and adaptation. Therefore, pledges to change in these areas – known among social psychologists as “stability attributions” – are more likely to be credible.

However, the theory also predicts that efforts to repair trust through this two-step approach would be more effective for e-commerce vendors with a high reputation than for those with a low one. Offering financial compensation to the aggrieved customer is therefore proposed as an alternative remedy for situations where rebuilding trust through social means does not work.

The model was tested through four lab experiments held at a Chinese university. A total of 300 participants took part in the four blind trials using the e-commerce platform taobao.com, after being told the experiments were investigating how customers choose products and sellers on the website.

The participants were presented with a manipulated webpage about an online tailor called Tailor KC, giving various combinations of five positive reviews; a negative review; and the tailor’s response to the negative review; depending on which trial they were allocated to.

Afterwards, the respondents were asked to complete a questionnaire. Statistical analysis of the results supported all five main hypotheses in the model, with the proviso that one sub-hypothesis was found to be only marginally significant.

Low-Reputation Firms Need Extra Efforts

“Our proposed approach to rebuilding trust, along with the disclosure of financial compensation, provides clear guidelines to help online sellers minimize the damage caused by trust violations that are incorrectly ascribed to the vendor’s integrity,” says Prof.Wang.

In this situation, the seller should respond to the online review by re-ascribing the incident to their competence or benevolence – despite the possible harm this could do to customers’ beliefs about them in regard to these attributes, he explains. The seller must then repair such potential further harm by promising to address the problem and prevent it from happening again.

“Our approach works because the seller accepts responsibility for the violation,” Prof.Wang says. “Earlier studies have shown that accepting responsibility is an effective way to demonstrate sincerity in restoring a broken relationship and that such sincerity is critical to repairing trust.”

The researcher notes that financial cost of the proposed social approach to making amends is considerably lower than providing financial compensation. However, e-commerce firms should note that customers are unlikely to believe such promises from sellers with a low reputation.

“These sellers must exert additional effort to repair trust, for example by providing financial compensation to victims, and publicly disclosing such compensation in order to address trust concerns among potential customers,” says Prof. Wang.