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Is it illegal to pay for reviews?

Reviews & Reputation — answered straight, by an operator who builds these systems rather than an agency selling them.

Short answer

In the United States, buying fake reviews and testimonials is prohibited by FTC rules and can carry civil penalties. It also violates the platform policies of Google, Yelp, and the rest, and detection has gotten good enough that the usual outcome is losing reviews you legitimately earned.

The longer version

The line is compensation for a review, not compensation for a customer. You may not pay for a review, offer an incentive conditional on a positive one, write reviews of your own business, or have employees post as customers. Fake reviews of competitors are also covered.

What is allowed: asking every customer, making it easy, and — in most jurisdictions and platform policies — offering a small thank-you that is not conditional on leaving a review or on its content. When in doubt, do not condition anything on the review.

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