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Is Yelp Monetizing Consumer Trust with Its New ‘Verified’ Badge?

Is Yelp Monetizing Consumer Trust with Its New ‘Verified’ Badge?

What is the Yelp Verified Badge and how does it differ to Google Local Service Ads? Yelp’s new paid feature has been rolled out for certain home services to supposedly help local businesses differentiate themselves from fake listings, but just how helpful will this really be to local businesses and their consumers? Tom Waddington has done his research and is here to tell us the pros, cons, and his thoughts on what Google and Yelp should really be doing to protect their users.

The “Yelp Verified Badge” is a new paid feature that Yelp is offering in certain verticals to help consumers easily find businesses with valid licenses. To earn the badge, a business is not subject to a thorough screening or background check process, it’s simply a license check.

Yelp Verified

A business applying for the badge can supply Yelp with their license number and issuing authority to help expedite the verification process, which Yelp says may take up to five business days. The cost of a badge, according to a post on Yelp’s blog, is $1 a day.

Where is Yelp’s ‘Verified’ Badge Available?

It is currently available to qualified businesses within specified categories in:

  • Arizona
  • California
  • Florida
  • Georgia
  • New York
  • Texas
  • Washington

The badge will continue to roll out to new states and categories over time.

Which business categories can use Yelp’s ‘Verified’ Badge?

Examples of current categories with this new feature include:

  • garage door service companies
  • movers
  • locksmiths
  • HVAC contractors
  • plumbers
  • general contractors
  • roofers

Will Businesses Utilize this New Feature On Yelp?

Yes and no. I think there will be plenty of businesses that will be happy to pay the fee to have the badge on their listing. There will also be many businesses that will refuse because they think it won’t be necessary (or they just won’t want to give Yelp any money).

If they’re relying on Yelp for leads, I think they will likely give in at some point, especially if their competitors have the verified badge on their listing or if their lead flow has been negatively impacted.

Is This Similar to Google Local Services Ads?

Since it’s essentially just a program where licensed businesses pay Yelp a fee to prominently display that they’re licensed on their listing, Yelp’s ‘Verified’ badge differs quite a bit from Google’s Local Services ads.

In that program, Google conducts a more thorough business check, provides a money back guarantee on work performed by the business, and has a separate area at the top of the results for “Google Guaranteed” businesses.

Participants in Google’s Local Services ads are also charged on a ‘pay per lead’ basis when their badge is present (indicating their ad is running) and a consumer contacts them through the ad.

Despite those differences, there are some similarities between the two programs:

  1. A way to extract more money from existing advertisers
  2. A way to get more businesses to become advertisers
  3. A way to help consumers feel confident when selecting a business

The first two were likely the main motivators while the third played a minor but important role for the marketing of these programs.

I’m happy when efforts to help protect consumers from fraudulent businesses are launched, but disappointed when I find out they’re only attached to advertising programs. Google and Yelp both seem to be aware that spam, fraud, and other forms of abuse are becoming more of a problem on their platforms, but instead of trying to improve the overall quality of their results, they allow existing abuse to continue and tack on something to help consumers try to differentiate the “good” results from the “possibly bad” results their platforms provide.

It’s a start, I suppose, but both need to put more effort in improving all their results, both paid and free.

Can a Consumer Trust a Business on Yelp That Doesn’t Have the Badge?

What is a consumer to think of a business on Yelp that does not have a verified badge?

Is the business less trustworthy than the one listed below it that does have the badge?

Perhaps they’re not licensed. Perhaps the business just didn’t want to pay to have the badge. Perhaps they tried to fake their way into the program by providing an expired, revoked or invalid license but Yelp rejected it.

These are all genuine possibilities and the consumer will likely not know the answer. I was curious about what Yelp would do if a business applies for the badge but is rejected due to an issue with their license. Would they allow them to continue to be an advertiser? I reached out to Yelp on Twitter and received a response:

This is not a surprising answer since having a valid license isn’t a requirement to be an advertiser, but it seems like a good opportunity to utilize facts you now know to help protect your users.

In these instances, Yelp has just researched a business and discovered that it isn’t licensed. If the business is in a category known to have a lot of abuse, maybe they shouldn’t be allowed to appear at the top of the results, or even in the results at all?

You may think, “If a business isn’t licensed, why would they apply for the badge?” Well, there are some shady businesses and lead generators that I think will try some trickery to get a badge on their listing.

Can You Report a Business If You think It’s Unlicensed?

Looking through Yelp’s website I noticed this support center page with the following question answer:

“It’s helpful for users to read about licensed and unlicensed businesses alike, but ultimately it’s the regulatory authorities themselves who are in the best position to determine whether or not a business is properly licensed. We invite you to share your information with them if appropriate.”

I get that they have wanted to steer clear of this before, but now they’re in the business of checking licenses and offering a verified badge for licensed businesses to display on their listing (for a fee). Removing listings for unlicensed businesses in categories with a lot of spam and abuse should be a priority to help protect their users.

Yelp often has enticing titles in Google search results:

Yelp Titles In Google Search Results

But now it’s possible for Yelp to know for a fact that one of “THE BEST 10 Movers in Los Angeles” isn’t even licensed.

Google Can Also Do Better Utilizing Information They May Already Have

Yelp isn’t the only culprit here, though. There are also times when Google knows a business is unlicensed, misrepresenting themselves, or is participating in fraudulent activity, yet they don’t completely remove the business from their local results.

Locksmiths, garage door companies, and moving companies are subject to Google’s Advanced Verification process. If they fail, they’re not allowed to participate in Google Local Services ads. This ruling, however, has no impact on the status of their Google My Business listing.

It’s good to see that Yelp and Google are taking some steps to try to help protect their users, but they could be doing more, even just by using information they likely already have.

Unlicensed businesses and lead generators are hitting some of these home services categories hard with fake listings and fraudulent activity. Doing more to maintain and improve consumer trust should be a top priority for Yelp and Google.

Ultimately, consumer trust is the most important factor for the long-term monetization plans of these platforms; I just think they need to be careful not to take the shortcut and monetize the consumer trust itself.

Tom Waddington
About the author
Tom Waddington is a co-owner of Wachae, a search marketing and analytics business. He has been involved in local search for over 10 years and has worked with numerous home service-related businesses. Tom is also a Google My Business Top Contributor and has been closely monitoring the evolution of Google’s Local Services Ads.

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