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Yelp to stop auto-creating fundraisers after outrage from business owners

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The company says it will make the program opt-in only

Image: Yelp

Yelp has paused an effort in partnership with GoFundMe that automatically opted tens of thousands of small businesses into fundraisers after complaints from restaurant and bar owners, the company tells The Verge. Yelp launched the initiative earlier this week in response to the ongoing coronavirus pandemic, but it did so without informing any of participants. Some business owners said the process for opting out — in the event they were hosting their own fundraisers or simply did not want one automatically set up by Yelp — was unnecessarily cumbersome.

“On Tuesday, Yelp announced a partnership with GoFundMe to provide a fast and easy way for people to support their favorite local businesses by donating to a GoFundMe fundraiser directly on the Yelp pages of eligible businesses. In an effort to get businesses help quickly and easily, a GoFundMe fundraiser was automatically added to the Yelp pages of an initial group of eligible businesses, with information provided on how to claim it or opt out should a business choose to do so,” a spokesperson said in a statement.

“However, it has come to our attention that some businesses did not receive a notification with opt-out instructions, and some would have preferred to actively opt-in to the program,” the statement goes on to say. “As such, we have paused the automatic rollout of this feature, and are working with GoFundMe to provide a seamless way for businesses to opt into the program moving forward, as we have received a great deal of interest and support for the program from both consumers and businesses alike.”

Some prominent critics of Yelp’s approach included Andy McMillan, an organizer of the annual art and technology festival XOXO and owner of Suckerpunch bar in Portland, and Nick Kokonas, co-owner of the Michelin star restaurant Alinea and other Chicago-based businesses. McMillan specifically called out Yelp’s process for opting out, which included providing Yelp with a copy of a personal identification card and an employer identification number. Yelp has since taken down McMillan’s fundraiser.

Kokonas demanded Yelp take down the GoFundMe when he noticed the link automatically placed on the Yelp page for Alinea. He said the entire situation was causing unneeded stress at a time when most business owners are simply trying to survive the current coronavirus-related lockdowns keeping bars and restaurants from fully operating.

“If you want to report on the worst behavior in the industry — here you go. This causes harm to our reputation, is done without consent, and is being done on a mass basis for their own benefit. Unbelievable. I don’t need to deal with this in the middle of a crisis,” Kokonas said in a follow-up tweet directed toward the food and dining website Eater. (The Verge and Eater are both owned by Vox Media.)

Yelp said in its original announcement of the GoFundMe partnership that it would be waiving fees and that both companies would match the first $1 million donated. However, critics of the partnership fast discovered that GoFundMe was setting the recommended tip, which is how GoFundMe funds its own operations, at 15 percent.

“Yelp does not get any portion of the donations. Donations through the GoFundMe platform may be subject to payment processing fees in some instances per the terms of the GoFundMe platform,” reads an FAQ page for the program.

Others, like XOXO festival co-founder Andy Baio (who is a friend of McMillan’s), noted that Yelp’s insistence that it would only set up fundraisers for small businesses with less than five locations was not entirely true. Baio began finding and publicizing GoFundMe pages for large companies, like multi-billion dollar French cosmetics company L’Occitane.