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

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.

Comments

So businesses don’t want free money because…low donations might indicate unpopularity of their business, or something? I don’t get it.

yelp regularly oversteps boundaries in relation to businesses, doing things for their own benefit and inserting themselves between businesses and their customers in order to make extra cash
good intentions or none, this just feels like another instance of that
plus, i’m sure that at the very least, from this guys point of view, if he wanted to make a fundraiser of some kind, he’d have preferred to do it himself on the crowdfunding site of his choice rather than have, again, a middleman asking for information before releasing funds
and on top of that the requirements to claim the campaign in order to close it down involved information that some business owners literally just don’t have, like the EIN mentioned in the article

As the article says, businesses might be organising their own initiatives and GoFundMe charges processing fees such as a 15% cut from tips that users might be unaware of.

GoFundMe is literally profiteering from people’s ignorance of how any of this works, thinking the businesses they support organised the crowdfunding drives themselves.

I’m working from home exclusively for the last 10 years and have no financial impact from this pandemic. Why would I want more money if there are a lot of people, who really need them? Oh, I get it, I’m not from US.

You don’t have to get it, because it’s none of your business. Just as much as it is none of Yelps business.

It’s not Yelp or GoFundMe’s decision to make. Imagine if some random person showed up in your front yard asking for donations from passers-by without permission and took a 15% cut because they unilaterally decided that you might need the money.

Also, there is no such thing as FREE money. The money given in these campaigns are by definition not available to give for other causes. The owner of the business may be doing fine or has some other financial safety line and thus doesn’t want people giving their funds to him and would instead rather them give to other causes (I know a business owner in that situation).

At the end of the day, this is Yelp and GoFundMe trying to make money during a crisis by acting altruistic.

TIL more about the mindset of businesses and capitalism, I guess. I mean I run my own business too (not Yelp-compatible), I guess I just haven’t thought of an analogy that would resonate with me. I certainly love and cherish the sense of control that I have in being my own boss (now), and controlling my financial situations as much as I can myself, so I can understand that.

Yelp isn’t notifying the business owners of these campaigns. If the business owner never discovers it, or can’t fill out the lengthy identification process to claim the funds, then Yelp just pockets the money.

nobody uses yelp in their andoid phone. we have google reviews in google map

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