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Consumers who rarely read the small print in terms and conditions when they are purchasing a product need to take heed to a story that’s hit the news this week.

A customer who posted a negative online review was fined $3,500 by the online retailer. KlearGear.com argued that the contract she had signed included a non-disparagement clause that prevented individuals “from taking any action that negatively impacts KlearGear.com, its reputation, products, services, management or employees,”  and as such, they were within their rights to fine her.

On the surface this may seem to be a harsh way for consumers to learn that in purchasing the product they must effectively become an ambassador for the company and its employees.  A KUTV reporter who has interviewed the customer, Jen Palmer, also spoke to a lawyer who declared the clause “outrageous” and likely unconstitutional. The couple purchased the item in 2008 and refused to pay the fine, KlearGear.com then reported the unpaid fine to the credit agencies causing the couple issues with their credit.

Igniyte would not advise adding such clauses to any online purchase terms and conditions for the below reasons;

  1. In most countries clauses such as this would not be upheld legally in court. In this instance the customer was not being defamatory about the company or an individual, she was simply commenting on the products use.
  2. The backlash to the unfair fine has brought further unwanted press attention to the company. Now, not only does it have an issue with the negative review, but with negative stories appearing in newspapers and high authority sites such as the BBC – all of which are ranking on page 1 of their search results.

KlearGear.com now has serious reputational issues, see below for Igniyte’s audit of their company’s current Online Reputation:

  • “complaints” features in the Google autocomplete suggesting to potential new customers that this company and their products may have some issues.. Negative terms appearing in Google autocomplete often leads a consumer to researching this term and ultimately be dissuaded from purchasing.
  • There are five negative posts on their first page search results in Google for their company name. All news reports about the fine and saying the company has gone into “social media lockdown”.
  • They have put out some PR today (Winterise your cubicle) with a couple of notable websites picking this up i.e. Reuters. This will have knocked off two of the previous negative stories on page 1 of their results.

Negative Reviews can stick and they also can harm companies such as online retailers as consumers research products online more than ever. The review of the product was placed on Rip Off Report and it could be that the company were trying to claim back the $2,000 that Rip Off report would be charging them to remove the review through their removal service

In getting KlearGear’s online reputation back on track we’d advise a mixture of the following:

  • Optimise a couple of their social digital assets (e.g. Twitter and Google+)
  • Start ASAP on a positive review strategy. Address concerns customers have and proactively seek happy customers and get them to log their product reviews on some high ranking review sites.
  • Get a blog going and ensure that they hook this up to Google+ to gain author rankings. Write about their products themselves.
  • Continue with an alternative PR strategy – more positive news is needed to replace the articles that rank at present.