Amy’s Baking Co. meltdown begs the question: Is Yelp bad for small business?


The very public meltdown of two guests on Fox’s “Kitchen Nightmares” has some debating online reviews.

Reality TV producers dream of people like Sammy and Amy Bouzaglo, the hypersensitive and slightly unbalanced restaurateurs who appeared on Fox’s “Kitchen Nightmares” this week -- and then proceeded to publicly melt down on social media, flinging all-capped profanities at the Yelp and Reddit users “working together to bring us down.”

The Bouzaglos, who own Amy’s Baking Co. in Scottsdale, Ariz., deny posting the angry comments and now claim that their Facebook and Twitter accounts were hacked. A spokesman for the couple says they’ve filed a complaint with local police.

The couple has made these kinds of complaints about Internet restaurant reviewers before. “We stand strong together,” Amy told open-mouthed host/chef Gordon Ramsey on Monday’s show. “We have to, because there’s a lot of online bullies and haters and bloggers. We stand up to them, and I think we’re the only ones who have as restaurant owners. And they come and they try to attack us and say horrible things that are not true.”

But while the Internet has rejoiced in the Bouzaglos’ raving -- their Facebook page has nabbed more than 85,000 likes -- even their angriest rants may hide a shadow of truth. Yelp reviews can destroy a business’s reputation, whether it deserves it or not, some owners say. In fact, more than 700 businesses and consumers have filed complaints about the popular online consumer review service with the Federal Trade Commission -- and earned Yelp a few mixed reviews of its own.

In the Washington area alone, more than a dozen businesses have filed complaints, according to data obtained from the FTC by the government transparency site MuckRock. One frequent criticism involves the site’s use of an automatic filter to hide potentially suspicious reviews. Hidden reviews do not count toward a business’s rating, and users have to take an extra step to see them, even if they’re positive. Some owners have accused Yelp of filtering out good reviews unless a business advertises with the site.

A complex and secretive algorithm chooses which reviews to display on Yelp.com. Some small business owners say they feel pressured to advertise with Yelp for favorable filtering. (The Fold/The Washington Post)

Other Washington businesses complained that they could not remove unfair or false reviews from their pages. And a restaurant in Fairfax County claimed that two vengeful reviewers threatened to destroy the business with their bad ratings even though they had never even eaten at the restaurant.

“I repeatedly explained that these comments against us [do] not match with our restaurant or description, but they [Yelp] don’t care,” the complaint reads. “This is an un-American act against hard working citizens … I need your help.”

In late 2012, one Fairfax contractor went so far as to sue a Yelp reviewer for defamation.

Their panic is, in some respects, justified. According to a 2011 study from the Harvard Business School, a one-star drop in a Yelp rating equals a 5 percent to 9 percent decrease in revenue, particularly among small businesses. A report that same year by marketing firm Cone Communications found that 80 percent of customers changed their mind about purchasing a product after reading negative information online.

But the opposite is also true: Good Yelp reviews bring in more business. A March report from the Boston Consulting Group surveyed 4,800 business owners and concluded that small businesses that use Yelp saw annual revenue increase by $8,000. Among businesses in the automotive and home sectors, those gains were even more dramatic -- $39,000 and $54,000, respectively.

Yelp helped pay for that survey, and it has seized on its findings as evidence that the site can work for both businesses and consumers. In fact, Yelp argues that it has provided plenty of tools and guidelines to prevent users from abusing the site. For example, business owners can respond to reviews that need correction or clarification, said Kristen Whisenand, a spokeswoman for the service.

Whisenand said that Yelp has never filtered out good reviews to force businesses to advertise with the site, and notes that, overall, more good reviews get filtered out because, according to Yelp’s analytics, users tend to leave vastly more good reviews than bad ones. The site also promises to remove reviews from trolls who have clearly never been to the restaurant. As of early Thursday evening, reviews of Amy’s Baking Co. had plummeted from more than 1,000 to only 105. Most still give the place only one star

But the Bouzaglos remain unconvinced.

As early as August 2011, one them complained on Facebook that Yelp had tried to “extort” the restaurant by filtering good reviews until the Bouzaglos bought advertising. The couple earned a reputation in Scottsdale for fighting back against their online critics.

In a statement posted to their Facebook page, the couple promised to host a grand re-opening of the restaurant next week, with a portion of proceeds donated to a charity that fights “cyberbullying.” Mike Saucier, a spokesman for the couple, said that Yelp had declined to take down a number of false reviews.

“Yelp said they wouldn’t, or couldn’t, do it because of the aneurysm -- er, algorithm,” Saucier said.

The slip was, perhaps, a telling one.

Caitlin Dewey runs The Intersect blog, writing about digital and Internet culture. Before joining the Post, she was an associate online editor at Kiplinger’s Personal Finance.
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