What is the role of reviews in marketplaces? Reviews and seller ratings let buyers judge a stranger before they pay. They show how past deals went, warn about bad sellers, and give honest sellers a reason to keep their standards up, because their reputation follows them from sale to sale. Together with verified sellers and careful seller vetting, they are how a marketplace earns trust. Since 2024 they also carry legal duties: fake reviews are now banned outright in the US and the UK, and already were in the EU.
This guide is part of our series on building trust in a marketplace. It covers what reviews and ratings do, how reputation systems and seller badges work, how to verify and vet sellers, and how to deal with fake reviews under the rules in force as of October 2026.
In short
- Buyers rely on recent reviews: 97% read them, 74% only look at the last three months and 31% only use businesses rated 4.5 stars or more (BrightLocal 2026).
- Copy what works on big platforms: two-way reviews published together (Airbnb), reviews tied to real purchases (Amazon) and protection against revenge ratings (eBay).
- Verify in tiers: confirm every email, ask for phone or ID in high-risk categories, and check documents only for business, payout or high-volume sellers.
- US INFORM rules cover sellers with 200 sales and $5,000 in 12 months, counting only sales paid through the marketplace, and small EU platforms are exempt from DSA Article 30.
- Fake reviews are illegal in the US, UK and EU, so publish a review policy, never hide genuine negative reviews and reward any honest review, not only good ones.
Part of the guide Trust and safety for your marketplace · Part 2 of 8 Next: Marketplace Fraud Prevention: How to Stop Scams and Spam →
The role of reviews and seller ratings in a marketplace
On a marketplace, the buyer usually knows nothing about the seller. Reviews fill that gap in four ways:
- They establish credibility. A history of good reviews is social proof that a seller is real and delivers what they promise.
- They reduce risk for buyers. Reviews describe product quality, communication and delivery, and negative reviews or low ratings flag problems before anyone pays.
- They help people decide. Firsthand accounts from earlier buyers show the strengths and weaknesses of each option and shorten the time it takes to choose.
- They hold people accountable. When buyers and sellers can rate each other, bad behaviour has a visible cost. Good ratings bring more business, and poor ones bring less.
How people use reviews today
BrightLocal's Local Consumer Review Survey 2026 (1,002 US adults, published 11 February 2026) shows that buyers lean on reviews more than ever, but trust them less:
- 97% read reviews when choosing a local business, and 41% always do, up from 29% a year earlier.
- Only 49% trust online reviews as much as recommendations from people they know.
- 74% look only at reviews written in the last three months.
- 31% will only use businesses rated 4.5 stars or higher, up from 17% in 2025.
- 45% now use ChatGPT or other AI tools for local recommendations, up from 6% in 2025.
For a marketplace owner, the lesson is that recent, believable reviews matter more than a long list of old five-star ratings. A review system that buyers suspect of being gamed does little good.
How reputation systems work: seller ratings, scores and badges
A reputation system turns individual reviews into a signal buyers can read at a glance. Most combine three things:
- Ratings and reviews: usually one to five stars with an optional comment, given after a deal.
- A summary score: the average rating and the number of reviews shown together, so that a 4.9 from three reviews isn't mistaken for a 4.7 from three hundred.
- Badges: verification badges (the seller's identity or business was checked) and earned badges based on behaviour, such as a high rating, fast replies or a long membership.
Some marketplaces reward top-rated sellers with more visibility, priority support or lower fees, which gives every seller a reason to reply quickly, describe items honestly and deliver on time.
What the big platforms do
- Airbnb has hosts and guests review each other. Both have 14 days after checkout, and neither review is published until both are in or the 14 days are over, so nobody can retaliate against a bad review (Airbnb Help, checked October 2026).
- Amazon labels a review "Verified Purchase" when it can confirm the reviewer bought the item on Amazon at a price available to most shoppers. Reviews without the label are still allowed, so the label is a signal, not a gate (Amazon Help).
- eBay lets buyers rate sellers, but sellers can only leave positive feedback for buyers. Problem buyers are reported to eBay instead (eBay Help, checked October 2026). This stops sellers from using negative feedback as a threat.
Two-way reviews, reviews tied to a real transaction, and protection against revenge ratings are worth copying on any marketplace, small or large.
Verified sellers: what verification proves and what it costs
Reviews tell buyers how a seller has behaved. Verification tells them the seller is who they claim to be. A verified seller badge is most valuable where scams are common: rentals, jobs, vehicles and expensive goods.
The need is real. Rental listings are a clear example: the FTC's December 2025 Data Spotlight on rental scams counts nearly 65,000 reports and about $65 million in reported losses from January 2020 to June 2025, with a median loss of $1,000. In the 12 months to June 2025, about half of the people reporting a rental scam said it started with a fake Facebook ad and 16% with a fake Craigslist listing. Scammers copy a genuine ad, change the contact details and repost it. An account that has to prove who it is makes that much harder.
| Verification level | What it proves | Typical published price (as of October 2026) |
|---|---|---|
| Email confirmation | The user controls an inbox | Usually built into the platform. Twilio Verify charges $0.05 per successful verification |
| Phone or SMS code | The user controls a phone number | Twilio Verify: $0.05 per successful verification plus $0.0083 per SMS in the US |
| Government ID and selfie | A real person matches a valid document | Stripe Identity: CA$2.00 per successful verification on its Canadian price list, first 50 free |
| Business documents | A registered business stands behind the account | Staff time to review a registration or tax document |
Use tiers rather than asking everyone for an ID. Confirm the email address of every account. Ask for a phone number or an ID before people can post in high-risk categories. Keep document checks for business sellers, sellers who receive payouts and sellers who post at high volume. Airbnb, for example, requires every host, new co-host and booking guest to be identity verified, and only asks for a government ID when other checks aren't enough (Airbnb Help, checked October 2026).
ID documents are sensitive personal data. Collect only what you need, keep them no longer than you need them, and say so in your privacy policy. Our guide to data privacy and security for marketplaces covers the rules.
Seller vetting: how to check sellers before and after they list
Seller vetting is the process around verification: deciding who may sell, checking them, and keeping an eye on them afterwards. A simple version that works for most classified sites and marketplaces:
- Set eligibility rules first. Decide who may sell, in which categories, and what a business seller must provide. Write it down in your terms.
- Choose how listings go live. New sellers' listings can be published straight away, after the seller confirms their email, after payment, or only after a moderator approves them. Stricter options suit high-risk categories.
- Verify in tiers. Email for everyone, more for the sellers and categories that carry more risk, as described above.
- Screen listings and messages. Look for the signs of a fake seller: prices far below market, copied photos, requests to pay by gift card or wire transfer, or pressure to move the conversation off the site. See our guide to preventing fraud, scams and spam.
- Give buyers a way to report. A visible "report this listing" or "report this seller" button turns every buyer into an early warning.
- Keep watching. Ratings, reports and disputes after the first sale tell you more than any document checked at sign-up. Suspend accounts whose details turn out to be false.
| Vetting tool | Strengths | Weaknesses |
|---|---|---|
| Identity verification | Fast and largely automated | Usually needs a third-party service and handles sensitive data |
| Business document checks | Confirms a real business stands behind the account | Slows down onboarding |
| Proof of authenticity (invoices, certificates) | Builds trust for branded or expensive goods | Needs the seller's cooperation |
| Ratings and reviews | Community-driven and visible to buyers | Can be manipulated |
| Manual moderation | Case-by-case judgment | Takes time and costs money |
No single tool is enough. Combine automated checks with human review and spend the most effort where the risk is highest. To keep costs down, send only higher-risk sellers through the expensive steps. To win over sellers, explain what you check and show the benefit: a verified badge on every listing. As you grow, write your criteria down so every moderator applies them the same way; our guide to moderation and marketplace policies covers this.
Template
Seller terms for your classifieds site or marketplace
Use this as the terms every seller accepts when they sign up or post; replace the bracketed parts and delete any section (such as fees or commission) that does not apply to your site.
A starting point, not legal advice: have it checked for your country.
The legal baseline for seller vetting: INFORM Act and EU DSA
Two laws set concrete seller-verification duties for many marketplaces. Check whether either applies to you before designing your own process. The summary below is as of October 2026 and is not legal advice.
Regulators care because fraud keeps growing. The FTC told Congress on 25 March 2026 that consumers reported losing $15.9 billion to fraud in 2025, from about 3 million reports, up from more than $12.5 billion in 2024, when online shopping was the second most reported fraud category (FTC, March 2025). An FTC Data Spotlight of 27 April 2026 adds that scams starting on social media cost people $2.1 billion in 2025, about eight times the 2020 figure. More than 40% of those who lost money said it began when they ordered something they saw in an ad, such as clothes, makeup, car parts or puppies, and most items never arrived.
| US INFORM Consumers Act | EU Digital Services Act, Article 30 | |
|---|---|---|
| In force since | 27 June 2023 | 17 February 2024 |
| Who must be vetted | "High-volume" sellers: 200 or more sales of new or unused consumer products and $5,000 or more in gross revenue in any continuous 12 months within the last 24. Only sales paid through the marketplace (directly or via its payment processor) count | Traders (business sellers) on platforms that let consumers conclude distance contracts with them |
| What to collect | Bank account details (or payee name), tax ID, working email and phone number. For a business, also a government ID of its representative or an official record showing the business name and address | Name, address, phone, email, ID document, payment account details, trade register number where registered, and a self-certification that products comply with EU law |
| Verification | Collect the information within 10 days of the seller reaching the threshold and verify it within 10 days of receiving it. Sellers re-certify every year. Suspend sellers who don't provide it | "Best efforts" to check the information against official databases or reliable documents. Traders who don't correct wrong or incomplete details must be suspended |
| Shown to buyers | Sellers with $20,000 or more in annual gross revenue: full name, physical address and contact details | Name, address, phone, email, trade register details and self-certification, where the product is presented |
| Other duties | A phone number and an electronic way for buyers to report suspicious activity on high-volume sellers' listings | Store the data securely for six months after the relationship ends, then delete it |
| Small platforms | No exemption, but sales the marketplace doesn't process payment for don't count | Platforms that are micro or small enterprises are exempt (Article 29), unless designated a very large online platform |
| Penalty | Up to $53,088 per violation, the FTC's 2025 figure, which stays unchanged for 2026; state attorneys general can also enforce | Set by each EU country |
Sources: FTC guidance on the INFORM Consumers Act; DSA Article 30 and Article 29; FTC notice of 15 September 2026 on 2026 penalty amounts.
What this means for a classified site
- Sites that never handle payments (buyers and sellers meet and pay in person): only sales whose payment the marketplace processes count toward the INFORM thresholds, so sellers are unlikely to become "high-volume" on your site. Take legal advice before relying on this, especially if you add online payments later.
- Sites that take payments or commissions can count sales per seller. Track the 200-sale and $5,000 thresholds so you know when the 10-day clock starts.
- Small EU marketplaces are usually exempt from Article 30. Collecting business sellers' details is still a cheap way to show buyers you take trust seriously.
- Everyone needs a visible way to report a seller and a documented way to suspend accounts whose details turn out to be false.
Fake reviews: the rules in the US, UK and EU
A review system is only as good as the reviews in it. When the European Commission and national authorities checked 223 major websites, including marketplaces, they could not confirm for 144 of them that the site did enough to make sure reviews came from real customers, and 104 did not tell consumers how reviews were collected and processed (European Commission, 20 January 2022). Trustpilot's Trust Report of 29 May 2025 says it received 61 million reviews in 2024 and removed 4.5 million as fake, 7.4% of the total, about 90% of them caught automatically. If a dedicated review platform filters out roughly one review in fourteen, a busy marketplace should expect some manipulation too.
Fake reviews are now illegal in all three main markets (as of October 2026; not legal advice):
| Market | Rule | In force since | What it requires | Penalty |
|---|---|---|---|---|
| European Union | Directive (EU) 2019/2161, amending the Unfair Commercial Practices Directive | 28 May 2022 | Bans buying, selling or submitting false reviews to promote products, and requires sites to tell consumers how they handle reviews and whether they check they come from real customers | Set by each member state |
| United States | FTC Rule on the Use of Consumer Reviews and Testimonials | 21 October 2024 | Bans fake reviews (including AI-generated ones), incentives conditioned on a positive or negative review, undisclosed insider reviews, company-controlled "independent" review sites, suppressing negative reviews with groundless threats or intimidation, and buying or selling fake followers or views (FTC, 14 August 2024) | Up to $53,088 per violation (unchanged for 2026) |
| United Kingdom | Digital Markets, Competition and Consumers Act 2024 | 6 April 2025 | Bans fake reviews, concealed incentivised reviews and misleading presentation, such as hiding negative reviews. Anyone who publishes reviews must take reasonable and proportionate steps to prevent and remove banned reviews (CMS, April 2025) | The CMA can fine up to 10% of global turnover |
Enforcement has started. The FTC sent warning letters to 10 companies on 22 December 2025. In the UK, the CMA opened investigations into five businesses on 27 March 2026, among them whether 1-star reviews moderated by Feefo were left off the Autotrader car marketplace and out of its star ratings, and whether Just Eat's rating system inflated some restaurants' ratings. As of October 2026 the CMA had reached no conclusions, but how a marketplace moderates and displays reviews is clearly now something regulators examine.
How to spot and handle fake reviews
- Publish a review policy on a visible page, not only in your terms. Say who can review, how you check reviews, how incentivised reviews are treated, and what you remove and why. Keep a record of removals.
- Tie reviews to real transactions where you can, and label them. Only call a review "verified" if you actually checked it.
- Never let sellers review themselves, and make staff or relatives disclose their connection.
- Don't hide genuine negative reviews. Remove reviews only for clear breaches such as abuse, spam or reviews of the wrong product, and never present the reviews you show as all the reviews you received if some were held back.
- Reward reviewing, not ratings. If you offer credits or loyalty points for a review, give them for any honest review, positive or negative, and label the review as incentivised.
- Watch for patterns: bursts of five-star reviews from new accounts, the same wording repeated, or several reviewers sharing one IP address or device.
What Regulators Expect From Your Review System
This page also replaces our older post on how reputation systems reduce risk, speed up decisions and raise customer satisfaction.
United States: the hosting exemption and its limits
The FTC's Q&A for businesses confirms that the Consumer Reviews and Testimonials Rule went into effect on 21 October 2024 and lets courts impose civil penalties for knowing violations. Two points matter most for marketplace owners:
- Hosting alone is exempt, featuring is not. A business that does nothing more than host consumer reviews is exempt from the fake-review provisions, but that exemption ends as soon as you pick reviews to feature in your own advertising or marketing.
- Review suppression is covered either way. Nobody may use unfounded legal threats, intimidation or false accusations to get a review removed, and a site that displays reviews must not hide reviews because of their rating or negative sentiment while presenting the rest as the full picture.
United Kingdom: no exemption for small platforms
The Competition and Markets Authority's guidance CMA208 (4 April 2025) says a lack of resources is no excuse: even a small trader, or a nascent platform where only a few users post reviews, must put reasonable and proportionate measures in place.
| What to do | Why it matters |
|---|---|
| Publish a short review policy that bans fake and paid-for reviews and says how incentives must be disclosed | The CMA's short guide for businesses says traders who publish reviews should publish policies that clearly prohibit fake reviews |
| Give users an easy way to report suspicious reviews, and investigate the reports | The CMA lists public reporting tools as an example of a reasonable step, but says publishers should not rely on users to police reviews |
| Sanction repeat offenders, for example by removing their right to post reviews, warning buyers, removing their reviews or banning their accounts | The CMA guidance says escalating sanctions may be appropriate against those who submit or benefit from fake reviews |
| Don't reuse hand-picked reviews in your ads without care | Featuring reviews in marketing removes the FTC's hosting exemption |
None of this replaces legal advice. A reputation system is only a trust signal if people believe it is honest, and regulators now expect you to protect that honesty actively.
Getting more honest reviews
Most buyers never leave a review, and unhappy buyers are more likely to write one than satisfied ones. That skews ratings. To get more, and more balanced, reviews:
- Ask everyone, at the right moment. Send an automatic request shortly after a sale or a completed meeting, not weeks later.
- Make it quick. A star rating with optional text is enough. A specific prompt, such as "How was the item compared with the description?", gets more useful answers than "Leave a review".
- Allow photos. A photo of the item as it arrived makes a review more believable and more useful.
- Show the average and the count together, and show recent reviews first. Buyers care most about the last few months.
- Help sellers answer criticism. A calm, public reply to a negative review often reassures future buyers more than a perfect score. When a review turns into a real complaint, follow your dispute process.
Reviews, verified sellers and vetting with Yclas
If you run your marketplace on Yclas, these tools are built in (see trust and safety on Yclas):
- Seller reviews and ratings. Reviews can be limited to buyers who paid for the item through your site, and sellers can't review their own listings.
- Seller verification. Sellers upload an ID or business document, your team approves or rejects it, and the document is deleted once decided. Approved sellers get a Verified, ID verified or Verified business badge, alongside earned badges: Top rated, Fast responder and Member since.
- Business accounts with trader details for the DSA, approved by you.
- Control over how listings go live: straight away, after your approval, after the seller confirms their email, or after payment.
- An AI check (on the Starter, Professional and Marketplace plans) that screens every new listing for scam patterns and your own rules written in plain language, and holds risky ones in a moderation queue with the reason. It never deletes anything.
- Warnings in buyer-seller messages that ask for gift cards, wire transfers or one-time codes.
- A Report button on every listing with DSA reasons, a reports queue, and a statement of reasons emailed to the seller when you act.
You can try it with a free 15-day trial and publish your review policy as a page on your site.
Frequently asked questions
What is the role of reviews in marketplaces?
Reviews let buyers judge sellers they have never met, warn them about bad ones, and reward sellers who do a good job with more sales. They are the main way a marketplace builds trust between strangers.
What does "verified seller" mean?
It means the marketplace checked something about the seller, such as their email, phone number, ID or business registration. A good marketplace says what the badge means, so buyers know how much to rely on it.
How can a small marketplace vet sellers on a budget?
Confirm every email address, approve new sellers' first listings by hand or with automated screening, ask for documents only in high-risk categories or from business sellers, and give buyers a Report button. Reviews and reports after the first sales do the rest.
Is it legal to reward customers for reviews?
In the US and the UK, you can reward people for reviewing as long as the reward doesn't depend on the review being positive (or negative) and incentivised reviews are clearly disclosed. Rules differ by country, so check yours; this is not legal advice.
Can I delete negative reviews?
You can remove reviews that break a published policy, for example abusive, spam or off-topic reviews. Removing genuine negative reviews, or hiding them while presenting the rest as all your reviews, can break the US and UK rules on fake reviews.
