Don's reply is correct but I live in "Realville" so let me give you my honest opinion on this topic
These policies that Google and Yelp spell out for obtaining reviews is a little ridiculous. I think the main intent behind these policies is they don't want you to outright buy reviews - as in having people who aren't even customers leave you a positive review in exchange for something of value (money, discounts, gifts, etc.). In other words, the policies are meant to curb fake reviews.
Small businesses have been soliciting reviews from their customers for years. This is a common practice. I personally see absolutely nothing wrong giving your customers an incentive to leave you a review. The keyword is "review." I don't think it's right to give them an incentive to leave you a positive review only (i.e. Leave us a
positive review and we'll give you 15% off your next purchase).
I think it's perfectly fine to give your customers an incentive to leave a review AFTER the transaction has taken place. For example, you send them an email, postcard, whatever after the sale that says you appreciate their business and for taking the time to leave you a review, you're giving them 15% off their next purchase.
Even if that crosses Google's policies, who cares? How are they ever going to find out? They aren't.
Now my caveat...I wouldn't advise that you go back to all your past customers and ask them for a review with an incentive. This could potentially lead to a flood of new reviews, which would definitely raise some flags with Google.
Travis Van Slooten
P.S. Your competitor who has 80 positive reviews does sound suspicious but you never know. They could be legit reviews. If they aren't, Google will eventually catch up to them. Even if Google doesn't, I wouldn't take that as a sign that you can get away with the same thing.