Yelp’s questionable business practices strike home at Louie G’s in Fife

As if being a small business trying to eke out a living in a small town wasn’t hard enough. For Louie G’s Pizza in Fife, that prospect just got a little harder after a recent run-in with Internet review site Yelp.

The San Francisco-based Yelp – which allows the general public to review businesses, posting comments about their experiences at the establishment and rating the business – has been under fire for years because of their questionable business practices, which some call downright extortion.

In September of 2009 East Bay Express reporter Kathleen Richards published a story detailing some of the problems Bay-area businesses were having with Yelp sales calls.

In the story, business owners claimed that Yelp salespeople were manipulating the reviews on their sites after declining to advertise with Yelp at the cost of $299 a month. The story claimed that negative reviews were often placed near the top of the list of reviews after the business owners declined to pay the monthly fees. Some owners even claim that Yelp added negative reviews and deleted positive ones.

For Louie Galarza, owner of the Fife-based Louie G’s Pizza, a restaurant and live music venue that is quickly making it’s mark in the local music scene, it sounds all too familiar.

Galarza told Northwest Music Scene that he was recently contacted by the Yelp sales department after an increase in reviews left by customers on the site, many of them positive.

According to Galarza, he explained to the sales staff of Yelp that he was a small business just trying to get by and that he wasn’t interested in their initial price of $300 a month for their service. Mysteriously, Galarza said the next time he looked at the site, his reviews had shrunk from 31 to 11 and the few negative reviews were featured prominently at the top of the list of reviews.

In his next conversation with the sales staff from Yelp, Galarza said he was told that although Yelp could not remove items from the site, they could filter the positive reviews back into the review list on the site…for the low price of $300 a month.

Galarza’s complaints with Yelp’s strongarm-esque sales practices are not unique. Recently a class-action lawsuit filed by several small business owners that claimed that Yelp was manipulating user reviews to force businesses to advertise on the site was thrown out by San Francisco Judge Marilyn Hall Patel as being speculative and unsupported, according to Huffington Post.

 “It is entirely speculative that Yelp manufactures its own negative reviews or deliberately manipulates reviews to the detriment of businesses who refuse to purchase advertising,” Patel wrote in her decision.

Patel did allow the  plaintives  in the case to refile, which they did in April of 2011, adding the complaint that Yelp also pays reviewers to write reviews of businesses.

Yelp officials contend that the company does not move negative reviews for paid advertisers, and insist that most businesses simply don’t understand Yelp’s business model, according to Chief Operating Officer Geoff Donaker.

“Do I think that sales reps call saying, ‘We’ll move your bad reviews? No. But I think it could be true – when you get to pick your favorite review and put it to the top, if I said it a little different way, it might sound nefarious.”

“Change isn’t good for everybody. The vast majority of dentists and salons are getting a lot of benefit out of the New World Order, but there are some who aren’t benefiting from it and like it the way it used to be. Maybe customers weren’t happy but they could market their way out of it,” Donaker added.

At the core, it appears that Yelp may not be doing anything illegal. Of course, it’s their site(Yelp) and they can operate however they wish but to purposely harm small businesses like Louie G’s is completely unacceptable. Anybody else see something wrong with this picture?

For Galarza, all he wants is out of the deal is to be out of the deal.

“I just want to be removed from the site. If you’re not gonna help me, then remove me.”