

Google is Evil, Worse than PayPal: Don't use Google Checkout for your business - ahoyhere
http://www.slash7.com/articles/2009/3/26/google-is-evil-worse-than-paypal-don-t-use-google-checkout-for-your-business

======
jsackmann
Thanks for posting this. Since I haven't seen any positive comments about
Checkout in the comments, so far, I figured I'd chime in.

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.

~~~
andreyf
Ok, now we have two self-selected samples of experiences with Google checkout.

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_

~~~
abstractwater
When things can go as bad as in the Slash7 story, statistics totally lose
their importance in my opinion. I will never ever pay for a service knowing
that it _may_ turn on me like that.

~~~
andreyf
Are you serious? Do you ever drive or cross the street? Because things can get
a _lot_ worse than losing $200, with, I imagine, a higher probability.

------
pg
The general implications of this are quite interesting. It means you can
compete with Google at anything where really good customer service is an
advantage, because the concept of customer service (except at such low
granularity as generating good, fast search results) is so alien to their
culture.

~~~
aristus
That's how we kicked their (and Yahoo's, and MSN's) ass in Latin America for
search advertising. We spoke the languages, answered the phone, answered
emails, dealt with icky non-US forms of payment, walked people through their
first ad campaigns, etc.

~~~
herdrick
Who is 'we'?

~~~
aristus
Terespondo.com. Comically tiny team compared to Overture. Yahoo/Overture
bought it in 2005. At our high point we handled search advertising for 7 out
of the top 10 sites in Latin America: UOL, Buscape, etc. Even MSN became a
customer.

~~~
adnam
Even the name implies good customer service: "I respond to you".

~~~
aristus
Yeah. :) That was by accident though. Tere started out as a metasearch engine
and answers service. (I was an early contractor. I left for a few years then
came back after they switched to ads and landed the MSN contract.)

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.

------
sgrove
Regardless of whether or not this is true, it's a very damaging piece for
google not to respond to. After reading it, I'm very hesitant to use their
checkout service - it simply isn't worth the risk.

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.

~~~
breck
I believe it because it happened to me as well.

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.

~~~
spoiledtechie
Ditto. Ditto Ditto. Sorry, but they did it to me. Was only $80.00, but Ditto.

~~~
seren6ipity
Could you please tell if you were also selling digital products?

------
mixmax
Google trusts algorithm, not people, and this is what gets them into potential
PR disasters like this.

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.

~~~
DenisM
How can you recognize that you have a "people problem" if you and your
coworkers are not "people-people" to start with? This is not a simple problem.

~~~
netsp
In retrospect, this is a bad business for Google to have gotten into for that
reason. They are not good with the type of problems that come up.

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".

------
jedberg
I used to work with the anti-fraud folks at PayPal. Most of them jumped ship
to Google about 2 years ago. PayPal was data driven, but required a human to
verify the results. Google is simply data driven. That should help explain why
they seem even worse than PayPal.

~~~
netsp
I would have guessed that if you wanted to create a paypal for the next ten
years you would want to go the opposite direction on the technology >> people
friendliness continuum.

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.

------
markm
Not having the chance to try Google Checkout as a Canadian merchant (it wasn't
available to Canadian merchants at the time we made our payment solution
decision), I'm reminded of a very early quote from Max Levchin when he
discusses one of the first years after Paypal launched.

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.

~~~
mechanical_fish
At the risk of being a shameless karma whore, let me note that Levchin's
interview in _Founders At Work_ is great and includes a lot of discussion of
this issue. Here's a quote that leaps out at me today:

 _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."_

------
davidmurphy
Wow. I will NEVER, ever use Google Checkout after reading this -- unless I see
a very, very, very, VERY convincing response from Google.

~~~
andreyf
Why not?

-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?

------
berrow
This sounds like the google algorithm for account termination has some hair-
trigger based on chargebacks. It basically means that a disgruntled (or just
plain vindictive) customer can take you out on a whim regardless of the truth
of the claim. The google model is not based on wetware or 'operators standing
by'. It is based on arrays of machines running code that will spit out
notifications (if their fraud alert is triggered) that are designed to
discourage you from ever calling. There isn't anyone back there. In this case
you get what you pay for and your business is just hanging in the breeze.

------
mwexler
Matt Cutts responded in the comments that he will take a look at it. I guess
this teaches us that the only way to get help from Google is to blog, get it
picked up by the aggregators, get a "celebrity" blogger to notice, and hope he
follows through. That's not encouraging.

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.

~~~
ahoyhere
Yes, I saw that this morning. (Was out and about yesterday.)

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.)

------
xenophanes
If google wants to close accounts, that's their right, it's not evil (though
it may be a good reason to choose their competitor), but they should pay out
the balance on the account first!!

~~~
sgoraya
Its evil since they did not give any prior notice AND are witholding monies.

~~~
xenophanes
My statement says X is not evil but Y is. Then you replied saying the
combination of an aspect of X, with Y, is evil.

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.

------
mauricio
Google seems to generally ignore customer support altogether.

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...

------
wvenable
I love using Google services: Search, Maps, Gmail, and so on but I've not seen
any evidence that even have non-technical support staff. If you call, they
can't direct you anywhere. It doesn't seem like a smart place to do business.

~~~
sgoraya
The Apps/Enterprise divsion has a support staff and they were helpful when I
setup our domain email accts. and with our enterprise licensing of gMaps API.

------
ivankirigin
PayPal killed lots of accounts to fight fraud, pissing off lots of people. I
think payments makes for an adversarial business, making customer support
harder.

------
lecha
Is there anything you think you were doing that may be interpreted as fraud?

~~~
ahoyhere
Doubt it. We were selling an ebook package (automated digital delivery) about
JavaScript performance.

~~~
briansmith
Is it possible that people paid for the book, and then some kind of technical
issue prevented them from being able to download the book? I am also selling
digital content and this is my #1 concern regarding payment processing.

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.

~~~
ahoyhere
I don't believe so, I haven't heard from any users about any issues except
with spam blockers. And those folks emailed me, I resent them a download link
myself, and then they always wrote back "yeah... it was in spam."

EDIT: And we had maybe 10 orders go through Google Checkout, max (thus the
$200ish amount). The other 470 or so went thru PayPal.

~~~
sireat
Since you only had 10 orders go through Google Checkout, it is possible there
were maybe 4 or 5 additional fraudulent orders which raised some red flag in
Google's algorithm. Then again, it could actually be a bug in their algorithm

Still, the issue is that Google provides no way of finding out the cause.

------
michael_dorfman
One obvious lesson here is "read your TOS agreements carefully." In this case,
Google seems to reserve for itself rights that most people would find absurd.
It's too bad it took an incident like this to publicize them.

~~~
run4yourlives
You can't reserve rights that violate the law. Just because a lawyer writes it
in a TOS doesn't make it valid.

------
Freaky
They sound exactly like PayPal. When they closed my account, I had about
100,000 successful payments, my own "personal account manager" and all that
jazz. One day they noticed we had an adult section and closed our account
without any warning and completely stonewalled any attempt to contact them.
$200? Good for you, we lost about £1500.

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.

------
10ren
Google check-out completes their advertising chain management, enabling
assessable advertising. Instead of pay-per-click, you can pay-per- _pay_. It
really is a fantastic concept for trying to optimize marketing automatically.

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.

------
andomar
Treating 1 out of 10.000 customers badly is hard to avoid.

~~~
chanux
But if you are a company (a good one), you should have a backup plan to help
that 1 user.

~~~
andreyf
And what would you suggest that backup plan should be? Keep in mind that the
false positive rate is probably about 1 out of 100, and fraudsters are going
to get really big payouts if they figure out a way around your backup plan.

------
mbowles
Very interesting...if Microsoft pulled something like this...every person and
govt in the world would be screamin bloody murder.

------
eli
Here are people complaining about this a year ago:
[http://groups.google.com/group/google-checkout-
payouts/brows...](http://groups.google.com/group/google-checkout-
payouts/browse_thread/thread/4b5a70d1d951a18d?pli=1)

I think the lesson is, do your homework on researching partners -- don't just
trust a brand name.

~~~
ahoyhere
Or the lesson is, that the people who get screwed ought to be a lot more vocal
about it to help other people in the future :)

I'm doing my part.

------
ryanwaggoner
You can't have an attorney represent you in small claims court, but can
someone else file and appear on your behalf? If so, perhaps someone in the Bay
Area should setup a company that helps people sue Google in small claims
court. Charge a couple hundred bucks or something.

~~~
briansmith
No, you cannot represent somebody else in small claims court, _even if you are
a licensed attorney_. The plaintiff and the defendant must represent
themselves. If either one is a corporation, then an employee of the
corporation (not a hired lawyer or consultant) must represent the corporation.

~~~
ryanwaggoner
Not disagreeing, but do you have a source? Also, what if one of the parties is
bedridden or something?

~~~
chriskelley
California Code of Civil Procedure 116.540 [1]

"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...](http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=ccp&group=00001-01000&file=116.510-116.570)

~~~
Keyframe
So, technically you could have an attorney as an employee for a month or two
and have him/her represent your company in the court?

~~~
ryanwaggoner
No, unless the attorney is defending himself/herself or is a general partner
in a law firm being sued:

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.

~~~
handelaar
Is there some way we can downvote this so far that it doesn't break the layout
on this page and render almost every other comment illegible?

Seriously. PLEASE quit that crap with the nowrap <pre>.

------
eli
Google has always had remarkably bad customer service with all their products.
I'm not really sure how they get away with it.

Of course, paypal is pretty bad too, so if there's are the only two options
you're considering, it's probably a wash.

~~~
ahoyhere
Paypal's gotten a lot better. In part, probably, due to maturity and loud-
mouthed complainers (I'll count myself in that group), and probably because of
the govt stepping in and forcing them to act like the financial institution
that they are.

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.

~~~
eli
_In part, probably, due to maturity and loud-mouthed complainers_

I think the federal class-action lawsuit on behalf of customers who had
accounts frozen may have played a bigger role.

------
jseifer
As of the time of this comment, typing "google paypal" in to Google search has
this link as the #2 result. I'm wondering if that will put anyone off.

------
mauricio
Doesn't Google even use script.aculo.us themselves?

------
elv
holy shit "let us be evil"

and what if they delist you to claim your rights? time to turn to yahoo?

------
chanux
Google: Don't show evil.

------
aditya
Intense. What has happened?

------
andreyf
Wee!

------
ahoyhere
Seems my blog engine pooped the bed.

Here's the raw (markdown) text:

[http://gist.github.com/raw/86239/990e88415f3b2cd1efb909893e3...](http://gist.github.com/raw/86239/990e88415f3b2cd1efb909893e33573825b9714a/gistfile1.txt)

------
ahoyhere
I would sue them if it made business sense. But I can't file in small claims
court in the right district, and it would end up costing me much more in time
and effort to recover the money.

Which is probably why you don't hear about people suing them all the time.

Which is why I wrote about it, instead.

~~~
briansmith
What do you mean by "the right district"? You don't have to file the claim in
Google's juristiction; you can file in your own juristiction.

~~~
ahoyhere
I am an American citizen with a US business (Delaware inc.), living in
Austria.

And I'd probably have to sue in CA, as the other commentor points out. Most
agreements do specify which districts. Or specify arbitration.

~~~
krschultz
The whole reason for founding in Delaware is the favorable legal structure.
You certainly have a solid case if they truly took $2300 from you without
cause and I imagine that once you retain a lawyer and file some paperwork they
will settle rather than fight you and lose over such a small sum. You might
end up spending $1000 to get it back but for pride's sake its worth it.

~~~
zandorg
If only the legal profession, like Google, had automation to save on costs.

------
ahoyhere
Brief update (will write more in depth later today):

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.

------
2cool
don't be evil

------
dschobel
Terrible customer service makes them evil?

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.

~~~
blurry
"Don't be evil" is google's corporate motto. I believe that's what she was
referring to.

~~~
dschobel
again, karma be damned, terrible customer service is an incredibly limp
definition of evil.

but by all means, enjoy the hyperbole. woe is the author, etc etc

