Google is Evil, Worse than PayPal: Don't use Google Checkout for your business
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I've been using Checkout since about January 2007 to sell digital resources through my site gmathacks.com. In that time, I've had thousands of purchases through Checkout with gross sales well over $100k.
Having had problems with PayPal before (not with this business, but a previous one), I was careful from the outset -- I generally err on the side of refunding people, I follow Checkout's procedure (click the "shipped" button, even though it's a digital product, etc.) to a "t," and I do the best I can with customer service in general.
My experience has, quite simply, been great. Checkout's algorithm seems to reject some purchasers more readily than other systems do (often, I think, because their IP doesn't match the country in their credit card address), which is better than a recent experience of mine through PayPal, when a $200 purchase was reversed weeks later because of a fraud concern. (Which turned out to be false.)
All the while, the fees charged have been way cheaper than PayPal's. (This, unfortunately, is changing. Depending on your monthly sales, Checkout fees are going up as much as 40% in the next month or two.)
I will say that little has happened to turn Checkout against me -- in 2+ years, my chargeback rate is just a shade over 0.1%. And as noted, I'm aware of some of the risks, so I've trod carefully.
All of this certainly isn't a defense for Checkout's (non-existent?) customer service and apparently faulty algorithms. But...while I'm glad to be aware of situations like this, I'll continue to happily use Checkout and recommend to others that they do the same.
While I appreciate your post, I'd like to point out that statistically speaking, we still have learned nothing about the risk/benefits associated with using Google checkout. sigh
I wonder why Google closed the account: was it that b/c she never clicked "Shipped" to any of the orders and so Google's algorithm thought the account fraudulent, or was there another reason?
If Google doesn't come clean on the reason, it's going to lose a lot of future customers.
In defense of Google, they've been losing money on Checkout from day 1. Everyone knew (or should have known) they would have to raise rates eventually. They've been low to try to convince people to get used to using Checkout. It hasn't actually worked very well and I'm guessing the Checkout folks would rather continue to lose money to gain customers, but with the belt-tightening at Google I guess they've got to prove they're a worthwhile business to have on the books.
Economics in general suffers from this problem too. It's easy to quantify things related to money, but much more difficult to deal with the benefits from more abstract things.
I think I draw a flag because I sell educational software, and they want to make sure that I'm not selling homework answers or term papers (or whatever they are worried about). I would benefit from some sort of flag that says they've checked me out N times, I'm probably good for the N+1st time (with maybe random checks afterwords). Or let the ads run and check concurrently.
For example, I shop sometimes in a supermarket that lets me scan the items with a handheld scanner and pay at a self-checkout lane. When I first started doing it, I was randomly (?--I assume) audited fairly frequently. But after very many (over 8 months maybe?) honest check-outs, I haven't been audited in at least two months. It seems I've earned some trust, and I find myself shopping there more because of the convenience.
Putting some sort of trust-factor into Adwords would be useful for me. Alternatively, somebody that could get me the returns that Adwords can (big hurdle) but puts in a trust factor would get my attention.
The technology was very lean and cheap -- Lackner, Leo, Drago, Paterlini, and Freitas are real hackers. But it wasn't sophisticated compared to Google then or Panama now. Our advantage was that when the phone rang a real human said "Bom Dia".
Amy's problem is not rare. It's one of Google's weak points.
aggregate (n): a sum total of many heterogenous things taken together
granular (adj): composed of or covered with relatively large particles
You mean that Google provides services that scale - like a fully automated checkout system, and doesn't provide services that don't scale - like personal support. I don't know if it'll end up being a wise one, but it's certainly an interesting business decision they've made...
Was your reply supposed to be an objection of some sort that I missed? What are you disagreeing with? Yeah, and what's up with 17 people who upmodded it?!
When a typical merchant signs up for a service, she'd look first for the expenses involved. If a non-free service springs up even with a great customer service, there is little chance they will get enough scale to compete successfully in the long run. As long as most merchants don't have big problems with mostly automated (and less friendly) services like this, Web-based payment services will stick to this free model.
That's an issue with this 'free' economy. Nothing is really free. We've collectively given up human customer service to get these 'free' services.
Also, given that engineers have to design their services to scale well, perhaps the answer is that we just don't know how to build cheap customer service yet? Perhaps they need a Mechanical Turk like interface for CSRs.
I dare you to try to get an answer from Google about how your site is indexed, or about how to accomplish something in analytics. There are several Google products where the only support option available is to post in a Google Support Group and pray that an engineer responds.
It's pretty frustrating.
Hopefully google can step away from their usual "no-comment" ethos and explain a bit about their termination process, and how they try to be fair. If not, this will undoubtedly show up on searches for their checkout service, and lead quite a few people away from it.
Terminating accounts without notice would be such an obvious and unnecessary evil that I wonder whether perhaps the mail just got lost in this particular case?
Still, providing no obvious contact info for inquiries is a showstopper either way. How am I supposed to trust someone with my money when that someone isn't even willing to talk to me in case of problems?
But then this is google, and they've worked hard to automate things more than any other company. In some cases, perhaps they've automated things farther than their technology is ready to take them.
What are you thinking of right now?
[Edit] Seriously. If you go to work everyday and someone tells you to 'Do No Evil', my bet is that you'll be thinking more about Evil (even just to avoid it) than you will about Good. Add that to human filters like uncertainty, laziness, or optimism, and that 'evil' gets released into the world. As a buzz phrase 2001, it was great; as a corporate mantra 2009, it's biting them on the ass.
A year or two ago I used Google Checkout for an online product which sold a few hundred dollars worth. I got a couple of emails from Google saying to "Make sure to ship the products" or something like that. Since they were virtual goods, I didn't bother to go to Google Checkout and click "Shipped" or whatever.
Fast forward about a year, and I log in to Google Checkout to a message that says "Your account has been closed. We can't tell you why. There is no appeal".
The funniest part was I was trying to BUY something with Google Checkout.
I think it's bad practice to not tell someone why their account was closed. I understand if it was because I never clicked "Shipped" or whatever, but I don't even know if that's the reason.
Luckily there are alternatives to Google Checkout. I just wish Google treated their customers nicer. Especially because myself and my company spend over six figures a year on AdWords.
I mean, I use Google nearly 24/7. They are by far my favorite company and generally their products are awesome.
I even still use Google Checkout for some of my friends' websites.
It's just that in this particular case it would be nice if they improved things a bit.
A story like this turns me off Google in a big way if I'm using them for anything at all commercial. I don't want to have to worry about the stuff I'm doing. The idea of Google Checkout is to make my life easier. They're failing that in a big way.
It's not even a lack of trust of Google. I think Google's a good company that's just stupid in some ways. It's more a matter of, I don't want to bother with that stuff. I'll find somebody easier.
A merchant that's sold a few hundred dollars worth of stuff is never going to be important enough to Google to bother putting a real person on. It may suck, but that's the way it is.
If the vendor in question had a few more zeroes on their sales figures, Google would make sure that the complaints were valid before shutting them down.
But I agree fully with the basic point - any small vendor should think twice before relying solely on Google Checkout.
Imagine if a bank did that with your $200 checking account.
My account was open for a month or less when they closed it.
Also, Google Apps has been stellar for business email so far.
I never understood this mentality... can you explain how you reached this conclusion?
http://www.google.com/search?q=google+checkout+closed+accoun...
It's also pretty typical for a one-on-one interactions with Google. Check out all the people who had their AdSense accounts frozen for "click fraud" with no recourse or detailed explanation.
Wiping out hundreds of dollars for who knows how many users, at some point doesn't that become worthwhile for a class action attorney to pursue?
Whether the closing of the account was right or not doesn't really matter here, what does matter is that this doesn't convey trust in Google at all. The accountholder is left with no options, and money that has outright been stolen from him by Google - at least this is what the the rest of the world sees.
The interesting thing here is that any competent PR or HR person would be able to tell you that this code of conduct was a PR disaster waiting to happen, but apparently the engineers got the last word.
It's OK to do regression testing on which words in a CV makes you a potential succesfu hire based on past history (which Google does), but it's not OK to let it replace the hiring process completely.
That's what seems to have hapened here. Google should hire some good people-people. They need it.
Basically it's the same as non-hackers not being able to recognise good hackers.
Just like a founder that recognizes he/she isn't good at design specifically seeks that skillset in others.
I was using paypal the other day & thinking the same thing about them. I came to the conclusion that they never would have made it today. Paypal is harder to use & more confusing then the Banks' online banking platforms. In a way, that's a huge missed opportunity. If they were the super-easy-to-use-and-understand-without-feeling-dumb type of company, they might have taken a stab at being an online bank.
They did succeed because the technology was the key. From reports, the technology was just so far ahead of anyone else' that nothing else mattered.
Google is not in that boat. There are all sorts of solutions and they all work. It's not adwords where "it's my way or the high way".
There is a lot to be done on making payment online painless & friendly. There is lots to be done in making accepting money easier and friendlier. There is even more to be done in making managing money cleverly easy.
I'm not sure how much work is still to be done on making those things safe & fraud proof. That happens less publicly. Could be a lot to do. But I suspect that the projectile in the other direction.
The quote attributed almost the entire first year of Paypal to fraud. Running and managing 3 CPA campaigns I can now understand why, it seems like everyone with a (stolen) credit card tries to extract the money through online scams.
It should have been clearly visible at the time that choosing Google Checkout would have been a risky decision as a merchant because Google was going to inevitably go through some of the same growing pains. Luckily for us, we dodged that bullet - but by no means is payment integration and fraud detection easy.
LEVCHIN: It's one of those things where, in the end, fraud is so nondeterministic that you need a human or a quantum computer to look at it and sort of make a final decision, because, in the end, it's people's money. You don't really want some computer saying "$2.00 for you, nothing for you." You need a human with a brain to say, "Hmm. This looks like fraud, but I really don't think it is."
-or-
Have you ever driven in a car? What do you suppose is more likely - a false positive in Google's fraud detection, or dying in a car accident?
Of course, many big companies have the same problems... so, can we propose a better way without it involving call centers or other massive human investment? Some human investment is great, but any solution involving "hire lots of people to help" won't fly.
For my follow up, I was planning to say essentially what you've said:
If it takes a massive blog publicity campaign to get somebody to look into it, there's still something rotten in Denmark. (Aaaand... nobody's contacted me about the $2k from the Scriptaculous Adsense money.)
Your reply is consistent with my statement, not contradictory, and is indeed a weaker statement. I say Y is wrong straight out, but you only criticize it in the presence of something else.
Yet you seem angrier than me, e.g. the CAPS, and you presented your comment as being about how Google is more evil than I said. So you or I must be misunderstanding something here.
My company used to pay $750/yr for their anti-spam enterprise scanning package they sell as a separate product from Google Apps. When I contacted them, via email, about a bug I had found, they said email support was only available to customers that spend $1000/yr or more. They sent me a link to their Google forums...
Now, I am using PayPal's authorize-and-settle function. I don't settle the transaction until I see in my logs that the user has downloaded the item. If more than a few hours has passed then I email the customer and ask them if they are having some kind of problem with the download.
EDIT: And we had maybe 10 orders go through Google Checkout, max (thus the $200ish amount). The other 470 or so went thru PayPal.
Still, the issue is that Google provides no way of finding out the cause.
(no particular point to this, just thought the story might be interesting to others.)
Do what briansmith suggests, you just can't be too cautious.
It says they can "restrict access to Service," not that they can take my money. It doesn't lay out reclaiming or claiming funds at all.
And, as the other commentor says, you cannot opt out of most provided-by-law rights.
At least when our Bank objected to our XXX section, they gave us time to do something about it. Of course, PayPal also didn't want quarter of a million in a bond to insure against chargebacks.
Problem: they suck at it.
So... this function really helps their mission, but they can't do it. Therefore, they should outsource this function, or spin off a startup so that it can operate on the values needed for success in it.
I think the lesson is, do your homework on researching partners -- don't just trust a brand name.
I'm doing my part.
"116.540. (a) Except as permitted by this section, no individual other than the plaintiff and the defendant may take part in the conduct or defense of a small claims action."
Most of the exceptions detail that the person appearing has to be a regular employee of the plaintiff, if not the plaintiff themselves.
[1] http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ccp...
116.530. (a) Except as permitted by this section, no attorney may take part in the conduct or defense of a small claims action.
(b) Subdivision (a) does not apply if the attorney is appearing to maintain or defend an action in any of the following capacities:
(1) By or against himself or herself.
(2) By or against a partnership in which he or she is a general partner and in which all the partners are attorneys.
(3) By or against a professional corporation of which he or she is an officer or director and of which all other officers and directors are attorneys.
Seriously. PLEASE quit that crap with the nowrap <pre>.
Laws vary by state.
In Massachusetts, you CAN have an attorney.
There is no legal obligation to file in the Defendant's court. US law allows a lawsuit to be filed in (1) the plaintiff's home court, (2) the defendant's home court, or (3) the home court of the jurisdiction where the events giving rise to the lawsuit took place.
Forum selection clauses ARE NOT BINDING UNLESS SIGNED IN WRITING. Most courts will not honor forum selection clauses between consumers and corporations due to the unfair bargaining power in the relationship. The other primary justification is that the corporation can afford to travel to a city where they willingly do business (i.e., provide goods or services.)
CHOICE OF LAW CLAUSES ARE BINDING. That simply means that the the court hearing the case may have to apply the law of a different state.
http://www.scselfservice.org/small/plaint/smallplantfiling.h...
Of course, paypal is pretty bad too, so if there's are the only two options you're considering, it's probably a wash.
You can call PayPal. There are actual people. They may be stubborn, but they are there. You can find out why your account is closed. And there are precedents.
Google Checkout: no contact. You can't call them. You can't email them. You can't appeal. No one, as far as I've been able to tell, is in charge of this beast.
I think the federal class-action lawsuit on behalf of customers who had accounts frozen may have played a bigger role.
and what if they delist you to claim your rights? time to turn to yahoo?
Here's the raw (markdown) text:
http://gist.github.com/raw/86239/990e88415f3b2cd1efb909893e3...
Which is probably why you don't hear about people suing them all the time.
Which is why I wrote about it, instead.
I'd be willing to put money on the fact that if you live in the state in question, you can use your local small claims court.
EDIT - Especially given that you could argue that Google provided the service in your home state to your home address.
One option would be for her to file with a local court and seek jurisdiction. This would be time consuming and costly though. I am not sure exactly how this would work with her being in the UK.
But the courts would decide the validity of the request. A single person suing a multi-national billion dollar corporation would have a good case.
Wikipedia has some more info, including certain states that favour the plaintiff.
http://en.wikipedia.org/wiki/Forum_non_conveniens#United_Sta...
There are ways around it, and as you pointed out you can file locally and try to convince the local court that i should take jurisdiction over the case. But this would cost you money and time. Plus, you would have an uphill battle trying to convince a court to overturn a clause you agreed to in the first place.
While you cannot always do it, at least in the states, if you are negotiating a contract for your business try to get the other party to agree to dual jurisdiction. Basically stating that your local court or their local court can have jurisdiction over the contract. Some parties will agree outright, others will want it to say something like if they sue you it has to be in your court, but if you sue them it has to be in their court.
You can try to change the jurisdiction, but it is hard to do this for a very specific reason.
FORUM SELECTION CLAUSES ARE NOT BINDING ABSENT A SIGNED WRITTEN CONTRACT. EVEN WITH A CONTRACT, ALMOST NO COURT IN THE US WILL HONOR A FORUM SELECTION CLAUSE BETWEEN A CONSUMER AND A CORPORATION.
Think about it: if forum selection clauses did have legal effect (between consumers and corporations), you wouldn't be able to sue most companies unless you were willing to go to Delaware (where roughly 90% of naitonal US corps are headquartered). The reason we have lawsuits everywhere is precisely b/c you can file anywhere, even despite a forum selection clause.
ONLY BUSINESSES NEED TO WORRY ABOUT FORUM SELECTION CLAUSES.
Choice of law clauses are different.
Now I am by no means saying that forum-selection clauses are an end all to potential contract lawsuits (key here being contract disputes and not just any lawsuit between a plaintiff and defendent corporation). There are ways to fight the forum-selection part, but you must be prepared to fight it and pay the legal expenses involved. Sometimes it is a matter of weighing the cost versus the outcome sadly and that is why corporations end up avoiding the lawsuits in contract disputes.
And I'd probably have to sue in CA, as the other commentor points out. Most agreements do specify which districts. Or specify arbitration.
There is no legal obligation to file in the Defendant's court. US law allows a lawsuit to be filed in (1) the plaintiff's home court, (2) the defendant's home court, or (3) the home court of the jurisdiction where the events giving rise to the lawsuit took place.
Forum selection clauses ARE NOT BINDING UNLESS SIGNED IN WRITING. Most courts will not honor forum selection clauses between consumers and corporations due to the unfair bargaining power in the relationship. The other primary justification is that the corporation can afford to travel to a city where they willingly do business (i.e., provide goods or services.)
CHOICE OF LAW CLAUSES ARE BINDING. That simply means that the the court hearing the case may have to apply the law of a different state.
TALK TO A LAWYER. Don't trust random comments on an online technology discussion board, especially where those comments claim that you don't have legal rights.
Some Google person with no last name & a fake-sounding first name (Sophie?) wrote me a very impersonal, automated sounding email that said:
"During a recent review it has come to our attention that your merchant account ID amy@slash7.com was closed due to a technical error. We apologies for the inconvenience it might have caused. We have re-activated your account and you are eligible to receive payouts."
Riiight. A recent review. Guess that had nothing to do with the fact that you guys made this topic a front page news item.
So now I've got my $200. Hoo-ray.
But this is ridiculous. I don't care about the money. I will never use Google Checkout again, once my money is out.
And I plan to continue to agitate for them to improve their policies, because I know I'm not alone in being ripped off... I'm just more loudmouthed and vindictive than most people.
Also, no word at all on the over $2,000 USD that was in the script.aculo.us Adsense account.
That's Google essentially stealing from an open source project. I just can't believe it.
By the way... My thanks to all the people outside & especially inside of Google who have tried to look into this case to the best of their ability. I truly appreciate it.
The problem is that it's no one's fault that my account got closed, and therefore no one's responsibility to fix it, either.
You have my full sympathies and it's a crappy situation but that has got to be the most banal version of evil I've ever heard of.
For a lot of people, that's close to some definition of evil at any rate. Either that or incompetence. But when it comes to money, most people view incompetence that ends up with their money being stolen as pretty much the same as evil.
but by all means, enjoy the hyperbole. woe is the author, etc etc