Dive Brief:

• When it comes to product ratings, consumers consistently overestimate stars and underestimate Arabic numerals, according to research published in the Journal of Marketing Research from earlier this year. 
• Researchers found that consumers usually round up when they see an incomplete star attributed, overestimating the star rating. Conversely, consumers tend to focus on the first digit when they see ratings expressed as Arabic numerals, resulting in lower perceived ratings.
• “These findings demonstrate that prevalent rating formats are misleading, highlighting the need for new industry standards,”  the researchers said.

Dive Insight:

Many online retailers use stars or numerals to display product ratings, while others use a combination of both.

Ratings and reviews can have a heavy influence on purchase decisions.  Small product rating increases — as little as 0.2 stars — can boost sales anywhere from 30%-200%, McKinsey & Company research from 2021 found.

However, there are no universal industry standards for displaying online product reviews. Still, the U.S. Federal Trade Commission has the power to regulate business conduct under Section 5 of the FTC Act, which prohibits "unfair methods of competition" and "unfair or deceptive acts or practices." The agency has guidelines businesses can follow to avoid running afoul of the law.

For the most recent study, researchers conducted 12 experiments to determine whether consumers accurately interpreted product ratings displayed as fractional star ratings (i.e., partially filled-in stars) or numerals (i.e., 3.5) and found neither method was effective.

Researchers, however, did find that numerals may be more familiar and easier for consumers to interpret.

“Using star ratings instead of Arabic numeral ratings may boost consumer perceptions of product quality, potentially leading to higher sales conversion rates, decreased cart abandonment, and increased product expectations,” the study said. 

That said, when organizations display stars and numerals, consumers primarily focus on the numbers. 

Based on the study’s results, the researchers recommend that e-commerce retailers and platforms use visually complete stars rather than partially filled-in stars to display product ratings because they are less likely to be misinterpreted by consumers.