Please ensure Javascript is enabled for purposes of website accessibility

Yelp Faces Backlash Over GoFundMe Page for Small Businesses Hurt by Coronavirus

By Donna Fuscaldo - Mar 27, 2020 at 3:34PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Yelp teamed up with GoFundMe to raise money for small businesses but failed to alert some of the enterprises, resulting in backlash.

Yelp (YELP 3.07%), the online review site, is facing backlash for its efforts to help struggling small businesses amid the COVID-19 pandemic. 

Earlier in the week Yelp, in conjunction with GoFundMe, launched a campaign to raise money for businesses harmed by the pandemic. Through the campaign, individuals would be able to donate to the businesses via Yelp. 

Online review on a computer.

IMAGE SOURCE: GETTY IMAGES.

While it was well-intentioned -- Yelp and GoGundMe vowed to match up to $1 million in donations -- neither company got permission from the businesses first. That led to backlash, with some small businesses expressing their outrage on Twitter.  

A Yelp spokesperson told The Verge that in an effort to get businesses help quickly and easily it automatically added the initial group of businesses that are eligible for donations. But since learning some businesses didn't receive an alert with opt-out instructions and others wanted the option to opt-in on their own, Yelp has paused the automatic rollout of the donation feature. Yelp said it's working with GoFundMe to deliver a way for businesses to opt into the program. 

"We have received a great deal of interest and support for the program from both consumers and businesses alike," the Yelp spokesperson said. 

While Yelp said it doesn't get any of the donated money, donations through GoFundMe could be subject to payment processing fees. According to The Verge, critics of the program contend that GoFundMe set the recommended tip at 15%. GoFundMe takes a cut of those tips. 

With the COVID-19 pandemic rapidly spreading across the U.S., scores of restaurants, bars, and small businesses have been forced to close. That's putting many of them at risk of going under if the shelter in place orders remain in place for several weeks or months.

Donna Fuscaldo has no position in any of the stocks mentioned. The Motley Fool recommends Yelp. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Yelp Inc. Stock Quote
Yelp Inc.
YELP
$38.23 (3.07%) $1.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.