Google Checkout Just As Bad As PayPal

Web brokers Google and PayPal don’t believe in human-to-human communication, and one place where you really need that is when you’re troubleshooting financial transactions. An interface designer/developer who used Google Checkout to sell an ebook has just been given a huge serving of suck by the “don’t be evil” company—they closed her account on her without warning and refuse to tell her why the closed it. The $200 in earnings that hadn’t been paid out yet are unretrievable, and she can’t open a new one.

The simple truth is, online transaction brokers aren’t held accountable to the same rules as banks, and resolving fraud and billing issues doesn’t appear to be scalable, or machine-solvable, to the degree Google and eBay would like. I’m as guilty as anyone of using both PayPal and Google Checkout to quickly pay for online transactions, but as of today I’m turning my back on both. Until they agree to staff resolution centers with real people who can resolve issues, there’s zero reason to trust them. If I pay with a credit card—and a single-use card if possible—then at least I know I have some rights should something go wrong. And the merchant, too, can trust that she’ll receive her money or have some legal recourse.

“Google is Evil, Worse than PayPal: Don’t use Google Checkout for your business” [slash7] (Thanks to Joshua and Heather!)

Comments

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  1. mac-phisto says:

    it’s pretty sad when your customer service is considered worse than a bank.

  2. Capt.Oblivious_GitEmSteveDave says:

    This reminds me of the South Park episode where they try to make money on the internet. I have long accepted that my web site will most likely never make me any money, only cost it.

  3. Nick1693 says:

    I think the difference here is that Google will probably respond to an EECB or come out and plainly explain why this happened. PayPal however, doesn’t give a shit as long as they get their fees.

  4. wcnghj says:

    I wouldn’t say worse then paypal.

    Also, their fees will be higher than paypals starting May 1st for international transactions. Looks like they are trying to phase it out.

  5. wickedpixel says:

    i use paypal quite frequently. it’s a lot easier to accept payment for freelance work via paypal than by check or having to set up a proper merchant account. but one thing i do, and would recommend to everyone, is to transfer the money out to a bank account as soon as you receive it. if the OP had done that, yes, her account would still be closed, but at least she wouldn’t be out $200.

    • wcnghj says:

      @wickedpixel:
      Google Checkout does not work like that. It automatically transfers the money after 1-2 days.

      The user cannot speed up the process.

    • Anonymous says:

      @wickedpixel:
      There is a 4 or 5 day window in which paypal can reverse the ACH transfer. I know because they did that to me with $3,500 upon closing my account without explanation.

      • suzieq says:

        @wickedpixel: You might want to reconsider Paypal for freelance work. Because you’re not delivering a physical product, you’re not covered under their Seller Protection Policy. Read this article at FreelanceSwitch for more info.

        [www2.freelanceswitch.com]

        I believe with Google Checkout you’re either covered for intangibles like graphic design work, or there hasn’t been a precedent set. Not trying to shill for Google Checkout or anything (I do use them for freelance work) but I think they are the marginally lesser of the two evils.

  6. bohemian says:

    So if both paypal and google checkout suck what are people supposed to use for small direct transactions?

    Correct me if I am wrong but don’t personal bank accounts in the EU have the ability for you to send money to other people’s accounts electronically via your bank?

    • corsec67 says:

      @bohemian: Some banks in the US have that ability as well, through an EFT (Electronic Funds Transfer).
      Some banks (INGDirect) call that an e-check. Other banks (USBank) don’t even know what an EFT is.

      An EFT is free, takes a couple of days. It isn’t a Wire, but does a similar thing.

      • bohemian says:

        @corsec67: You have to make sure it is actually an EFT. Our bank has an “online bill pay” service but it mails a paper check to the recipient.

        • MikeVx says:

          @bohemian: At ING, at least, it is an EFT, I’ve used it. You have to have the routing and account numbers of the entity you are sending money to.

          ING Bill Pay is much the same as anywhere, you load in the information on the payee, and they do electronic or paper as possible.

          Interesting wrinkle: The ING checking account doesn’t send you checks to use, if you need a paper check, you tell the web site and the computer mails the check. You cannot sneak paper past them unnecessarily, the computer checks and will use EFT if the recipient is set up for it.

  7. IphtashuFitz says:

    I see nothing in the Google Checkout ToS that says they can keep the $200. Seems to me like another good reason to take Google to small claims court.

  8. dougkern says:

    but as of today I’m turning my back on both. Until they agree to staff resolution centers with real people who can resolve issues, there’s zero reason to trust them.

    uh…ok?

  9. Ber'Zophus says:

    Everyone sorta says that Google isn’t evil…but do we really know how well they deal on a customer service standpoint? I mean, it’s not like there are a constant ton of Google stories on Consumerist of bad support from Google….at least that I’ve seen in a long time. Hell, just searching the Consumerist for Google, and entry two for Google is how Google Checkout will be the less-evil PayPal (written in 2006): [consumerist.com]

    How many people have actually had issues with Google and needed their support? I mean, without even anecdotes to go off, how well do we know they’ll be able to handle issues? I’d be concerned exactly this sort of thing announced is going to start happening more often…if it isn’t yet already. Are they really as soulless as E-Bay but with a great sheep costume? Or is this as one-off as any one-off issue that’s bound to happen, and Google Checkout isn’t at all as bad as paypal?

    Anyone actually had first-hand experience dealing with Google, good or bad?

    • XTC46 says:

      @Ber’Zophus: I had trouble with them with adsense previously. My account was disabled, and payment not made for “violation of terms and conditions of service” I emailed to ask what the violation was, no answer, submitted an appeal, no answer, submitted another appeal and email, no answer. I finally gave up since it wasnt all that much money.

      But the samed happened with Yahoo!. I had an account with them and was answering questions on Yahoo Answers. I answered 15-20 questions on my first day, of which 2 or 3 were makred as best answer and i was awarded points, then my account got disabled. No reply as to why after several emails.

      These services are offered for free to the consumer, so really, what can be expected?

  10. VeeKaChu says:

    Hmmm… this is sad; I refuse to use scammy scammy PayPal, have done for years, yet I’ve grown to love the convenience of Google Checkout, and have always felt an extra measure of confidence because I thought Google had my back.

    Now you tell me they’re doing evil too. My dreams are shattered. Hopefully, as someone said above, they’ll come forward and address this somehow.

  11. QuiteSpunky says:

    Hear hear! I decided to close my Paypal account after one too many of these stories from Consumerist and getting a notice that my Paypal account was on ‘alert’. Then the nightmare of simply trying to CLOSE the account began. Paypal will not close the ‘on alert’ account without mailing me some sort of confirmation, and I have moved since I opened the account, so my account is apparently in permanent limbo. Anyone else have this problem?

  12. LegoMan322 says:

    I stopped using PayPal once I stopped using eBay. Both website are very shaddy and I will never use them again for anything.

  13. Anonymous says:

    I too used to use Paypal to sell a product online, and they closed my account without warning. Even though the terms of use did not say so, they told me they don’t allow people to sell non-physical products because of the “risk”. They ended up holding more than $4000 for 6 months “in case any customers need refunds”. (The product was $9.95.)

  14. Axel Aguado says:

    What I do is link my Paypal and Google Checkout accounts to my credit card. That way, I’m not leaving my credit card info all over the internet at various websites, but if I hit a problem that Paypal/GC doesn’t want to resolve, I just hit them with a chargeback from the credit card company.

    Easy.

  15. Craysh says:

    Might not really help, but you can call google at (650) 253-0000
    Select ‘Option 0′ to talk to an operator.

  16. howie_in_az says:

    This does not bode well for Android (TMobile G1 and soon the Vodafone G2) developers as Google forces us to use Google Checkout to sell applications via the Android Market, plus they shave 30% off the top for transaction processing and kickbacks to carriers.

  17. I_am_Awesome says:

    What did Google say when you contacted them for a comment on this article?

  18. Anonymous says:

    Google checkout sucks from the OTHER end too. I was buying some accessories for some Etymotics and the store used Google checkout. A couple of days after I placed the order still no communication. I go to Google checkout and it says that the company charged my card. I email the vendor and they say that Google placed my card on hold.

    I go back and verify that Google says that they have already authorized a charge. I write the vendor again. They INSIST that it’s Google’s problem. I spend the next half hour trying to find ANY way to contact Google about this, the closest I get is their suggestion to go to some discussion group.

    Nope not for a financial transaction. I cancel with the vendor and remove my credit card info from Google checkout. Never again will I use Google checkout. They have ZERO customer service.

  19. tz says:

    I had a problem with a vendor who didn’t respond when an item was delayed or back-ordered or something, and Google Checkout canceled them (after I detailed to them what was going on). It was email, but it was a live person who was responding and it was investigated.

    This was on the consumer end, and I haven’t seen an equivalent of “paypalwarning.com” with new horror stories daily. This is the first one I’ve heard from google checkout, but the red flag is up.

  20. Anonymous says:

    I have been using PayPal for almost 3 years for my eBay business, and I have never had a major problem. And when I did have the 1 or 2 small problems, they were very helpful. I love using PayPal. Hmmm…..

  21. consumerd says:
  22. Anonymous says:

    Google fees doesn’t help paypal. Paypal is still the worst online payment company in history. Unlike paypal google doesn’t freeze your money and hold it and keep it whenever they feel like it. According to surveys, sellers and buyers still preferred google over paypal because they can still get their money regardless if it costs a few dollars more

  23. Anonymous says:

    I can’t speak with authority about Google checkout, but my experiences with Paypal have been a nightmare. I hope this is mistaken, and that Google does a better job in this field. I also can resist to express my disgust for PayPal.

  24. Evan Coonrod says:

    I bought an ebook from these people and had to email them about my order. They didn’t get back to me for a week. Finally I had to bug them on twitter. To their credit they took care of my issue quickly at that point but I shouldn’t have had to do that.

    One wonders how many of their other customers were similarly ignored and decided to do a chargeback. I’m not saying that’s definitely the case, I don’t know, but it casts doubt on the “Big Bad Google closes account for no reason” angle.

  25. Anonymous says:

    I used to work for a company that made software that interacted with shopping cart websites like Amazon and EBay and so on, and payment gateways. We refused to work with Google Checkout because the service is so poorly made. The transaction system (transaction in a TCP/IP internet sense) was designed so poorly, that when you made a request, they couldn’t promise when they would reply. So if we even tried to work with them, we could have the system hang while it waited for a response from Google Checkout, which may never come.

  26. Anonymous says:

    I turned my back on PayPal over two years ago and I haven’t looked back since. I only used Google checkout once when it offered a $10 off promo, but cutting myself off from those accounts has probably saved me a lot of money, and it’s definitely saved me infinite levels of aggravation. I understand a lot of people make their living receiving cash via PayPal, et al, but it seems sometimes the only solution is to eliminate the problem.

  27. Meathamper says:

    I’ve just been told to put money in an escrow account I’ve never heard of. Much safer.

  28. MrsLopsided says:

    According to [www.slash7.com] they are located in Austria. Google Checkout is only available to US or UK merchants.

    I frequent webmaster forums and have yet to see a Google Checkout or Adsense complaint that after deeper investigation wasn’t the result of a material breach of the TOS.

    I believe there is more to this story.

    • Brontide says:

      @MrsLopsided: +1

      If you read the full post you will find they are no stranger to finding themselves on the wrong side of a Google block. Last time it was over 2k “stolen” from an AdSense account.

      While it would probably be best that Google disclose the nature of the closed account, they have no obligation to.

    • Apeweek says:

      @MrsLopsided:

      My Google checkout account was pulled for breach of TOS in a manner very similar to the complainant, with no warning. Google took money from me too, for pending sales.

      However, I specifically had someone at Google interpret the TOS for me before I signed up, and my site was declared OK at that time.

      I sell lottery software and an instructional lottery DVD. Google checkout’s TOS does prohibit gambling, however, this was supposed to apply to illegal gambling or direct online gambling, not state lottery sites or products (perfectly legal) or software that does not directly facilitate gambling (lottery software does not directly interface with live gaming), or simple DVD video presentations.

      At some point, about a year after I signed up, Google decided to reinterpret their gambling ban to apply it to me.

      I pointed out that a DVD of the movie “21″, which details a system for winning blackjack, should be just as prohibited under this policy as my lottery DVD. However, this movie can still be purchased with Google Checkout.

      • Brontide says:

        @Apeweek: Even if you paid for merchant account and CC clearing account gambling and gambling aids are a gray area that would leave you exposed to being shut down by the first complaint that gets lodged against your business.

        Google Checkout, as well as every other processing software, has policies so vague as to be able to decide which payments to accept and which ones to refuse.

        [checkout.google.com]

        • Apeweek says:

          @snowmoon:

          Well, if Google actually had a complaint against me I might understand. All my customer feedback was extremely positive.

          Again, state lotteries are fully legal, and not considered a ‘gray area’ anywhere else.

          Do you really consider any of this justification for the surprise ‘take away his money and shut him down with no warning’ policy?

  29. Blueskylaw says:

    PayPal needs to be broken up like Ma Bell was or at least be severely regulated.

    As soon as a big behemoth corporation like Ebay gets a hold of a company that had a good Idea (PayPal) they will do whatever it takes to squeeze every penny out of you until you scream, and that’s when they are just getting started.
    PayPal is like a bounty hunter, they can break into your house without a warrant and do things that the police can’t even do, which makes them a dangerous animal indeed.

  30. Apeweek says:

    Google checkout did something similar to me.

    I used them to sell products on my website for over a year. Then they changed a rule, or their interpretation of a rule, or something, and suddenly decided I was in violation.

    So without warning – and with no communication whatsoever – Google pulls my account, and takes a nice chunk of my money for pending sales for themselves.

    I tried to resolve the problem, but never did get a coherent explanation of what was wrong with my products, or why Google had to go all SWAT team on my account, with no warning.

    I’ve been annoyed with PayPal a few times, but they have never pulled anything as blatant as stealing money from me.

  31. Matt Cutts says:

    I’m a software engineer at Google. I just tried to leave a comment on Amy’s original post, but it looks like she’s disabled comments on her post. I wanted to mention that Google investigated the issue, discovered that there was a technical issue, and reactivated Google Checkout for her. We sent her a hand-written email, but the last thing Amy said before (apparently) closing her page for comments was that Google sent a form letter. I saw at least one of the emails we sent, and it wasn’t a form letter. I’m sorry that Amy had this bad experience, but Checkout is reactivated for her now.

    • MooseOfReason says:

      @Matt Cutts: Matt, do you know if she received her $200?

    • Apeweek says:

      @Matt Cutts:

      Hi Matt, I have left a couple posts here about my own Google Checkout account experiencing a surprise shutdown similar to this one.

      Really, I’m not looking to have my product reactivated (I use PayPal now), but I want to vent about the way Google applied their very ambiguous policies toward me.

      I had emailed with someone at Google when I set up checkout, to be sure that my state lottery products were OK. At that time, I was told Google’s gambling policy applied to online gambling or other potentially illegal gambling (state lotteries are perfectly legal, after all.)

      After using Checkout for a year or so, Google apparently decided to reinterpret their policy toward gambling. It is certainly within Google’s rights to do this.

      But why, then would Google not communicate with me about this? Why the surprise attack? Why take money from me for sales I had already shipped? In addition to the money Google took from me, my site had to be down while I arranged for a new payment processor.

      This is the part that makes people angry with Google, Matt.

  32. Mariushm says:

    He/She should sue Google in small claims court:

    This guy did it and won:

    [www.huffingtonpost.com]

  33. WOPDingo says:

    Why bother with either of these services. I’ve found it much easier and reliable to use the “random account number” generator provided by my two CC companies. I’m not sure if all CC companies have that feature yet, but it’s great.

    • tjrchicago says:

      @WOPDingo:
      That doesnt help with the problem of being able to receive payments. You’re still somewhat obligated to one of these two services unless you want to setup your own merchant account.

  34. johnfrombrooklyn says:

    Google and PayPal both rely on the fact that their online user interface works for 95% of the people. They’ve also run the numbers and realized that it’s cheaper to just give the shaft to the remaining 5% of the people than actually have a phone staff.

  35. Geekybiker says:

    The problem is that these services arent regulated at all. They act alot like banks, but have none of the consumer protections the law allow with real banks.

  36. redkamel says:

    wait, can someone tell me whats bad about paypal? Ive been using it once in a while to pay for ebay and online stores and havent anything happen ever…

  37. Anonymous says:

    I’ve been using Paypal for 10 years. Opened an account when it was….FREE!! LOL I’ve had zero problems in all that time but, after reading all the horror stories that abound, I opened a Paypal dedicated bank account. The instant I receive payment, I transfer to my bank account. As soon as I receive credit in my bank account, I transfer it to another bank account, that has never be connected to Paypal at any time, leaving 5 bucks. If they screwed me out of five bucks, I’d be pissed but not devastated. Works for me.

  38. teresa316 says:

    I signed up for Google Checkout. I opened a new bank account and the bank gave me the wrong account number, so I never received my micropayments to confirm that I’d given Google the correct bank account.

    So I went to the interface to correct the problem. To correct it I had to verify the wrong account by entering the amount of the micropayments, but I couldn’t because that account did not exist. When I tried the ‘help’ option I was instructed to enter the correct micropayments to verify the account and then I’d be allowed to change my bank account information.

    I sent about a half dozen emails – never even received an email telling me they received my email.

    I called Google and was told they don’t do phone support and was hung up on. Apparently they do NO support whatsoever.

    I have about $35 locked into an account I cannot access.

    I’m going to City Hall and file a small claims case – see how that works.

    Google Checkout TOTALLY sucks. It would be interesting to see how much money they have locked up in their system.