1. “Trust in us may be misplaced.”

Which juicer makes the smallest mess, and what hairstylist does the best blowouts? Consumers increasingly look to online reviews to help them decide what to buy and where.

In December, visits to the popular local-business review site Yelp.com were up 15%, year-over-year, according to Web traffic analysis site Compete.com. Similarly, travel review site TripAdvisor.com saw an 8% increase in visitors, and traffic to local-services review site Angie’s List jumped a whopping 80%. What’s behind the rising demand? In a 2012 report from market research firm Nielsen, 70% of consumers said they trust online reviews, a 15% increase from 2009. That means online reviews are second only to personal recommendations from family and friends as the most trusted source of buying advice, researchers say.

But as many as 30% of online reviews are fake, estimates Bing Liu, a professor of computer science at the University of Illinois at Chicago who researches customer reviews. Businesses and manufacturers can easily find people online who are willing to write reviews for just a few bucks without ever using the product or service in question, says Jack Vonder Heide, chief executive of research group Technology Briefing Centers. On Amazon Mechanical Turk, a task-for-hire marketplace on Amazon.com, one listing soliciting a 50-word review of an undisclosed local service offers payment of 50 cents. A would-be writer’s listing on task site Fiverr.com — which has a section devoted to reviews for money — promises two 250-word write-ups for $5, and offers to use pseudonyms “to make the reviews seem like they are from real customers.” An Amazon spokeswoman says such listings are not permitted. “If we find a task that is offering paid reviews, we will remove the task,” she says. Fiverr.com did not respond to requests for comment.

Review sites concede that fakes are a problem, but say they each have systems in place for picking out suspicious write-ups, from automated filters to special investigation teams. Still, systems aren’t foolproof, so it’s on the consumer to read between the lines. Some clues: Very brief reviews without much detail beyond a basic opinion tend to be fake, says Vonder Heide. “If it’s loaded with technical specifications, almost like it’s coming out of a brochure or marketing copy, that’s another red flag,” he says. Some sites also restrict reviews to known customers: Booking site Expedia.com, for example, only allows reviews for travel completed through the site, while subscription-based Angie’s List requires users to use their real names, which it says it verifies.

2. “We have skin in the game.”

In another kind of fake review, the reviewer is very familiar with the product or service. It’s not unusual to see a business owner and their employees, friends and family members post under false identities, says Vonder Heide. (Users call the accounts “sock puppets.”) That usually results in a glowingly positive review, but can also surface as a bad review to “stick the knife” in a competitor, he says. It’s no surprise why — a 2011 Harvard University study found that a one-star-better difference on Yelp.com accounts for an extra 5% to 9% in sales for an independent restaurant. Study author Michael Luca, an assistant professor at Harvard Business School, says results would likely be similar in other industries. Review sites’ policies typically allow owners to respond to reviews, but prohibit business owners and affiliates from reviewing themselves or soliciting others to do so.

Sock-puppet fakes are easy for site users to spot, says regular Yelp reviewer Jesse Dawson, a costume designer in Las Vegas. “You’ll see a business that has suddenly gotten its first review, and it’s five stars, gushing about it, with some offer of a coupon or extras,” he says. Unlike reviewers who earn income posting scores of fake reviews (for a wide range of products and services), reviewers who have skin in the game aren’t likely to post many reviews, beyond those that benefit their business. To avoid getting caught out by site moderators, they don’t flesh out their profile with a picture or personal details. And often, the fake reviews are posted at suspicious times, Dawson says, like just before a business’s grand opening, or immediately after a competitor gets publicity.

Users are warned not to review a business if they are connected to the employer or employees, says Darnell Holloway, Yelp’s manager of local business outreach. Some sites even impose penalties on business owners, beyond removing suspect reviews. A TripAdvisor spokeswoman says penalties can include a lower position on the site’s popularity index, ineligibility for awards and lists, and red “penalty notices” on the business page alerting travelers to suspicious reviews.

3. “Venting online is a good way to wind up in court.”

General contractor Christopher Dietz, the owner of Dietz Development in Washington, D.C., is suing former client Jane Perez for $750,000, alleging she damaged his reputation. According to the complaint: In reviews posted on Angie’s List and Yelp, Perez alleged that Dietz damaged her property, trespassed and may have stolen jewelry. The suit says the reviews also stated that Dietz had received sanctions from state agencies and had been sued by another client. “She can say I’m a crappy contractor; she’s allowed to say that,” says Dietz. But he contends that Perez’s accusations go beyond statements of opinion and are untrue. Paul Alan Levy, an attorney with the Public Citizen Litigation Group who is representing Perez, says his client stands behind her review: “She believes that everything she says is true.” A December court order required Perez to modify her posts; later that month, the Supreme Court of Virginia reversed that decision. The lawsuit is currently pending. “I am now on year two and lawsuit number two of dealing with this business over a project that was to take three to four days,” says Perez. “Meanwhile, I already have $14,000 in legal bills over a $9,000 project.”

Business owners haven’t been shy about taking legal action against the writers of negative online reviews — in part because the Communications Decency Act prevents them from going after the review site, says attorney David Wachen, a partner with Washington, D.C., firm Shulman, Rogers, Gandal, Pordy Ecker. (For more instances, see Commenting online? Call a lawyer.) “What you need to be very careful about is, opinion is protected by the First Amendment, but false statements of fact are not,” he says. Reviewers should consider their wording carefully before posting; the Public Citizen Litigation Group publishes a guide to writing with libel in mind. Don’t assume posting anonymously will shield you, either. “Sometimes people have a false sense of security, if they’re sitting in their pajamas writing nasty things about people under a pseudonym, that no one is going to figure out who they are,” Wachen says. “While it can be challenging, it’s not impossible to track you down.” See citizen.org’s Writing with Libel in Mind: a Guide for Non-Profits and Bloggers

Some states have so-called anti-Slapp (strategic lawsuits against public participation) statutes that make it tougher for businesses to pursue defamation claims. But even protected speech or an anti-Slapp statute doesn’t prevent someone from suing — it just means they’re less likely to do so successfully, Wachen says. That can still be a very expensive legal battle. Prolific reviewers should examine the liability portion of their homeowners’ or renters’ insurance, to be sure it covers defamation claims, says Levy. If it doesn’t, he says, they might consider purchasing an umbrella policy that will.

4. “Five stars does not a stellar product make.”

When everything’s super, nothing is. Yet a 2008 University of Illinois at Chicago analysis found that 60% of reviews across Amazon.com awarded products five stars. Another 20% of reviews awarded four stars. TripAdvisor says its average rating for hotels is currently four out of five, and as of August 2011, according to Yelp, 39% of its site reviews gave five stars and 28% gave four stars. Liu, the UIC professor who conducted the Amazon analysis, says the trend runs counter to expectations: “Most people say that if they have a good functioning product, they are not likely to write a positive review,” he says. “It is only when they have a bad product, they are more likely to write a review to complain.” Prevalent fake and solicited reviews probably contribute to the higher ratings, he says, especially since the number of negative reviews is small relative to the number of customers. (The sites say that their policies and processes catch the bulk of fakes.) Shoppers are also more likely to give feedback on purchases they get excited about, which is often why they’re buying in the first place, says Brad Williams, president of public relations firm Weber Shandwick’s North American technology practice, which has studied consumer reviews. “It’s easier to get reviews about a tablet computer than a humidifier,” he says. That enthusiasm can spur more ratings, which in turn fuel more purchases, creating a perpetual loop.

It’s not uncommon for reviewers to have a little fun, either. Case in point: the four-star rating for a gallon of Tuscan Whole Milk at Amazon. The 1,427 reviews — a little more than half the number the $69 Kindle has garnered — include jokes, poems and other odes to its apparent greatness. “This is milk deserving of something better than a Flintstones plastic tumbler,” wrote a commenter in 2006, whose appraisal, complete with glass swirling and tasting notes, is still ranked as the second “most helpful” review. And the raves are still coming. In February, another reviewer left a haiku along with her five-star rating. (Negative reviews mostly focus on issues of lactose intolerance, rather than quality. “Poison,” writes one such critic.)

Some sites say the reason there are so many high ratings is because consumers read so many reviews before making a decision. “Consumers generally come to us at the beginning of a project to find good help,” says a spokeswoman for Angie’s List. “They hire companies that have already earned good ratings from other members, so they generally have good experiences, so that’s what they report on later.” Faced with a choice among several high-rated goods or services, review details come in handy: They can help consumers discern whether your five-star expectations jibe with what previous customers experienced, says Luca, or if they fall short. It can also be worth looking to see how many contributions come from the review site’s top reviewers — a distinction usually reserved for those who regularly contribute write-ups the community has found useful. For example, Elite Yelp reviewers tend to have more “accurate” ratings, says Luca, reflecting where a business’s average is likely to fall over the long term.

5. “Variants may be silenced.”

Getting the full measure of a business may require some digging beyond its main review page. Alex Company Jewelry in Newton, Mass., for instance, shows up on Yelp with a 2.5-star rating, thanks to three one-star reviews among the five posted. In the “About This Business” section near the bottom of the page, however, there’s a single line in parenthesis that reads “(27 Filtered)”. Yelp visitors who think to click on that hyperlinked text, enter the two code words displayed on the screen and click to confirm their choice can read another 27 reviews — all but one of them with five stars. If those were factored in, the store could have a 4.5-star rating. “These are not made up stories,” says Alex Zamsky, owner of Alex Company Jewelry. “These are my customers.” According to Yelp’s Holloway, the site uses filtering software to automatically remove reviews that violate its terms of service and content guidelines, including those that seem biased or fraudulent. He says sometimes even legit reviews are filtered out for quality control. “Legitimate reviews — even the ones from your favorite customers — aren’t always as helpful as others, so there is no guarantee that they are going to be showcased,” he says. “Keep in mind that Yelp isn’t a drive-by testimonial site.”

What gives? Sites weigh individual consumer experiences differently in their ratings formulas. At the Better Business Bureau, a business with one unresolved consumer complaint could have an F rating in the letter-grade system, while a competitor with 600 resolved complaints might still earn an A rating, says Dennis Garrett, an associate professor of marketing at Marquette University, and board member of the Wisconsin Better Business Bureau. (The Better Business Bureau did not respond to requests for comment.) Epinions.com users have the ability to rate reviews as “Not Helpful,” or “Don’t Show,” which can render some posts unviewable to users who aren’t logged in, says a spokesman. Yelp estimates 80% of users reviews are showcased, with the remaining 20% filtered.

Review filters aren’t all bad — they are often sites’ first line of defense in limiting fake and biased reviews that might lead to a bad purchase decision. But experts say consumers may find better data looking at the review details rather than the overall rating. “I always tell consumers, drill deeper,” says Garrett. Consider the total number and nature of reviews, rather than relying on the overall rating displayed. That may not factor in a recent improvement or decline in service, he says, or a trend in problems reported.

6. “The discount made us love it.”

Special treatment can influence some reviewers to be more positive, or write a review. In a 2011 Cornell University survey of 166 Amazon “top 1,000” reviewers, 85% had received free products from manufacturers and publishers — and 78% said they often or always posted a review of such products (88% said their reviews were often or always positive).

Federal Trade Commission regulations require reviewers to disclose any freebies or payments received for writing a review, says a spokeswoman. But there’s no fine or penalty for consumer violators — the agency focuses more on whether marketers are telling customers to reveal the connection, she says. Site policies typically allow merchants to suggest that customers write reviews, but prohibit them from offering incentives or discounts. Most also encourage reviewers to disclose any factors that might have influenced a review. According to Yelp’s guidelines, users shouldn’t accept freebies in exchange for their review; however, “if you independently luck into a free drink or two because of your charming personality, by all means, enjoy the largesse, but don’t forget to mention the free perks when writing your review.” An Amazon spokeswoman says companies can offer a free product up front through the Amazon Vine program, but must allow for both positive and negative reviews. The write-ups note that a review product was received. Other forms of compensation are not permitted, she says.

7. “Reading reviews compromises your objectivity.”

Being satisfied with a purchase may have as much to do with checking product or business reviews as picking the right product or business. Positive or negative reviews can flavor consumers’ experiences after reading them, says Luca. “You’re told this is good; therefore, you think it’s good,” he says. A 2013 study from Weber Shandwick found that, as a result of consumer reviews, 65% of shoppers picked a brand they weren’t already considering.

That can mean you aren’t getting your money’s worth, if the resort or restaurant is really just so-so. But there can also be an upside to going in with a set impression, says Kit Yarrow, a professor of psychology and marketing at Golden Gate University in San Francisco. “People don’t always trust their own assessments,” she says, so knowing the negatives that other reviewers have found can help consumers take action earlier if it turns out that, yes, the vacuum is making a funny noise. Your attitude going into a transaction can also affect the way you act and the way the service provider responds — you may just get a better experience because you’re being nicer, she says.

But there are limitations to the influence. Luca says businesses often see more negative reviews after they run a half-priced daily-deal voucher, because the experience may not live up to the prior positive reviews. And Yarrow points out, glowing reviews aren’t likely to sway consumers with markedly different preferences or interests.

8. “Our opinions are priceless.”

Hoang Uyen Nguyen of Lauderdale, Minn., isn’t a regular review writer. “I’m a busy person,” she says. But when she gets a post-purchase email from a retailer asking her to review the item in question, she usually does. “I try to acknowledge good products because a lot of times, I feel like people just write reviews if they’re unhappy,” she says. And she’s not alone: although studies have found that emailed requests for feedback have low response rates, they still snag a few shoppers. Plenty of retailers send out similar reminders for feedback, hoping to boost review numbers and ratings that can be used in ads and sold to partners for reposting, says Vonder Heide. Epinions, for example, allows paying partners like price-comparison portals to show “snippets” of reviews, says a spokesman. TripAdvisor says it makes money licensing out content to properties and tourism groups. A body of negative or positive reviews can sometimes motivate local businesses to buy ads or to pay for prime placement on review sites, says Vonder Heide. In the fourth quarter of 2012, Angie’s List had $132.6 million in revenue from service providers who bought ads or other site services, up 80% from the previous year.

Sites including Epinions, Urbanspoon, Citysearch and Insider Pages say consumers retain the rights to their review, meaning they can change or remove their comments at any time. But while the review stands, there’s little people can do to keep part of their review from showing up on the business’s website or a shopping portal as the review site allows, Vonder Heide says. Amazon’s spokeswoman says display advertisers can share “praise from satisfied customers while also clearly showing the overall product rating and total review count.”

9. “Fake reviews are sometimes better than no reviews.”

Despite all the policies and procedures in place to weed out fake reviews, for retailers that allow on-site product ratings, fakes aren’t so bad, says Liu. “For them, positive reviews mean good business,” he says. Shoppers comparing options are more likely to buy a product that has a few positive reviews than one that has no reviews at all. And they may opt to buy elsewhere if none of the products have been reviewed. A 2012 study from social media marketer Bazaarvoice found that 84% of millenials and 70% of boomers say consumer reviews and other user-generated content influence what they decide to buy. “Without consumer input, millenials don’t buy — almost anything,” the researchers wrote.

Independent review sites like Yelp, Angie’s List and TripAdvisor have more incentive to hunt down fakes than retailers do, says Liu. “They want their sites to be trustworthy,” he says. To be sure, the filters on many sites are designed to block fakes precisely because ferreting them out after the fact can be onerous. Cornell University researchers developed an algorithm that, according to their 2011 report, can detect fakes 90% of the time; of the three human judges they tested it against, the most accurate scored a 62% accuracy rate. Many sites say they have teams dedicated to reviewing the reviewers for problems, but it’s still a full time job. TripAdvisor’s resolution team, for instance, is on the job “24 hours a day, 365 days a year, making sure our reviews are real,” says a spokeswoman.

10. “Business owners may be moderating our conversation.”

When you’re hunting for a pizza place or pet groomer, expect business that paid for preferential listing to show up at the top of the list. Businesses can take control of their page for free on most sites, a move that allows them to respond to consumers’ reviews and add more details about a business. But paid advertisers can get preferred billing, with their listings showing up first on Web and mobile searches. (Sites say ads are easily identifiable, and that consumers can sort reviews by rating, proximity and other factors to easily navigate.)

Dietz says he gets regular calls from Yelp offering to help him capitalize on his page views and “work on” his negative reviews. “I haven’t taken them up on it,” he says. “It’s a principle thing.” Other business owners seem to have similar viewpoints. Two different groups of business owners brought class-action suits against Yelp in 2010, alleging that Yelp manipulated reviews to get businesses to buy ads. A California court dismissed the merged suit with prejudice in 2011, meaning it cannot be re-filed, but lawyers have filed an appeal to the Ninth Circuit U.S. Court of Appeals. “Simply put, there has never been any amount of money a business can pay Yelp to manipulate reviews and our review filter does not punish those who don’t advertise,” says Holloway. “Anyone can check out any advertiser’s page on Yelp to see for themselves that our review filter works the same for advertisers and non-advertisers alike.” Yelp co-founder and chief executive Jeremy Stoppelman, in a 2011 blog post on the site, called the lawsuits “misguided.” “Our automated system applies the same objective criteria to all reviews, regardless of a business’s advertiser status,” he wrote.

More From MarketWatch