Google is Evil, Worse than PayPal: Don’t use Google Checkout for your business

The whole saga is worth reading, but just to let you know: here’s the latest.

Wanting to offer an alternative to PayPal, we set up a Google Checkout account for people to buy our ebook.

The last email we received about our Google Checkout account was “Helpful tips regarding your first Google Checkout orders” on February 9th.

But a few days ago, I logged in, and this is what greeted me:

And if you click that link, “I had pending payouts for charged orders. Will I receive these payouts?”, you’ll see that the answer is “Nope, you’re screwed.”

So, to sum up our experience with Google Checkout:

  • they did not try to contact us to resolve any issue
  • there’s no way to find out why they closed our account, due to “security reasons”
  • there was no notice (we found out by accident, when we tried to pay for something with Google Checkout)
  • they kept over $200 of our money
  • there is no appeal
  • there is no one we can contact
  • we cannot open a new account
  • our money is gone, even though people have received their products

And I don’t know if you noticed, but that agreement section doesn’t actually have anything to do with this situation. It’s clearly just there to cause a sense of despair & make readers believe they have no legal recourse.

Crime Does Pay

This is on top, of course, of their theft of over $2,000 for Adsense revenues for the web site for script.aculo.us, which happened in similar circumstances (no warning, no appeal, no replies, etc., etc.).

So, despite any number of ads I’ve clicked in my life using Google search, they’ve also made a cool $2300 at least from us by stealing our cash outright.

Translation: Google is even worse than PayPal.

Do not use Google Checkout for your business.

PayPal, as a company with financial services that have caught the eye of the government, is subject to a lot more regulations… and, surprisingly, acts better.

‘Don’t be evil’ my ass.

Lest you think we’re an exception, we’re not the only ones who have been robbed by Google; this guy sued and won in court, but he was lucky to reside in the correct district. For us, it’d be a bad business decision based on the costs vs possible reward. So it is with most people, which is how Google can get away with it.

90 Comments

  1. Sam says:

    It’s frustrating isn’t it. A Small-Claims court will get your money back though?

    They did this to my AdSense account and kept the revenue, in a similiar "don’t call us ever again" email.

    Being in the UK, I did a data information request, which forces Google to hand over all the data they store on me, to find out what caused their unprompted behaviour, they ignored that to; which is actually illegal but I can’t be hassled with going to court over it, and since I get 80% of traffic from Google, I wouldn’t want them to de-list me.

    Considering their "do no evil" moto, their actions are quite the opposite. The fact that they do a lot of web services doesn’t excuse their terrible behaviour, watching the BBC the other day their CEO seemed to gloat that they get "sued every day".

    I hope you sort it out, I can’t suggest to you laws that can offer you protection, as I’m only in the UK.

    All the best.

  2. Jim says:

    Listen all’aya’ll, its a sabotage.

    I’m sorry Google broke your balls for the 200 bones. Certainly appreciate the heads up post about it. I was hoping you would post after seeing the suspenseful tweets about the issue a few minutes ago.

    I wish there was more I could do than shrug and apologize, because I dig what you do.

    Stay up, homie.

  3. Yossef says:

    Not to come across as an ass here, but what exactly would you be apologizing for, Jim? Are you the VP of Google’s customer payments division?

  4. Amy says:

    Yossef, don’t be an ass. :) People say things like "I’m sorry you have the flu," even when it’s not your fault.

    If the VP of Google’s customer payments system would address me as "homie" and refer to "200 bones," I would give up all grievance. ;)

  5. Jim says:

    Yes actually and I’ve used the profits from this venture to fund my latest e-book, "Creating a Business with Google Checkout".

    I meant apologizing as in "sorry it happened." But I meant empathizing not apologizing. Or is it sympathizing? Sorry!

    -Jim, VP of Synthesizing

  6. COP says:

    Discovered this link on twitter.. we were planning to integrate with Checkout but this makes it a clear choice to go with Amazon FPS..

  7. MikeB says:

    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.

  8. Miles says:

    Thanks for the warning, Amy. You and Thomas are good people. Google, what you have done to these people is wrong, immoral and probably illegal. You may say you’re not evil, but your actions say otherwise.

    Amy, I hope your blog post gains some legs and ends up on the radar of the rich and powerful. Google must be held accountable.

  9. Breck says:

    Something similar happened to me. I sold a virtual product which required no shipping and Google kept telling me to "process the order". I had already processed it so didn’t bother to log in and click "processed" or whatever. Fast forward a few months–my account is closed with no explanation and they tell me I can never reopen it. Seems silly.

  10. Toni Ann says:

    This is awful. I am very sorry to hear this. Does anyone know an alternative to Google Adsense? Or do they own the monopoly? Same thing happened to me.. no explanation.. :-( I have appealed many times to no avail..

  11. David says:

    Shocking. I will NEVER EVER use Google Checkout.

    This is absurd, worst ever in history of the world customer service.

    SHAME GOOGLE! SHAME!!!!!

  12. Brad Heintz says:

    Wow – I had, merely hours ago, decided to move ahead with using Google Checkout for a project. Thanks for the heads-up.

  13. Erik says:

    I hope everyone who is thinking about adding payment processing to their site reads this.

    I had exactly the same with Paypal. I did absolutely nothing wrong (just like you) and still my account got suspended indefinitely without possibilities for appeal.

    The best advice I can give is to go with one of the smaller credit card processors, get to know them a bit and sign a contract.

    At least make sure you can call your processor. It’s a shame Paypal and now apparently Google Checkout are run by bureaucratic accountant types.

  14. Scott says:

    Take them to small claims. Can be done with just $15.00. Youll make a lot of your money back.

  15. BillBasher says:

    It’s not bureaucratic [1], it’s just completely automated and the fraud detection algorithm seems to generate some false positive alerts.

    [1] My def of bureaucratic involves paper and people, these are missing here.

  16. Don says:

    Leaving any money sitting in Google or Paypal accounts is a mistake. They have those of us with irregular sales or smaller totals over a barrel and they know it. Signing up for a proper merchant account and using someone like Authorize.net is the way to go but only really cost-effective at a certain quantity.

    I’d love to never use Paypal again but there’s just not any other practical options for me. Anyone else in the same boat should simply make sure to transfer their money out and to their bank account on a very regular basis.

  17. Ric says:

    Thanks for the warning, Amy. I’ve had (fairly) good experiences with SecureTrading.com – not sure if they operate outside of the UK, though

  18. deb says:

    Ah being cheated by PayPal i was looking towards Google Checkout. But the scene is even worse here it seems.

    PayPal has restricted my account, and 300 dollars with it, which being a small web guy, its like 30/40% of my monthly income and hurts so much.

    So many great, brilliant guys/hackers there, bringing out startups, products everyday there in USA. Can’t someone create a better system to beat paypal?

    Whats with wasting time inventing all this Twitter/FriendFeed useless apps? Can’t someone talented enough put his knowledge to good use & make a system that would help millions of innocent users & save from PayPal? :(

  19. Smitny says:

    For the guy who said this is inducing him to go with Amazon.

    Our experience with Amazon hasn’t been fantastic either. We sell on Amazon using their program that lets us put products into their catalog and fulfill them ourselves.

    They keep track of customer feedbacks and will cancel your account if you get more that 20% negative feedbacks.

    The problem is that if you sell, say, 100 products a month and get only 3 feedbacks a month, when one customer gives you a negative one, it’s suddenly 33% negative feedbacks and Amazon cancels your account. Even though the actual negative feedback rate was 1% of total orders.

    And they send a similar "don’t write to us, there’s no recourse, we don’t want to hear it" email.

    In our case we managed to get them to reinstate, but if you look at the forums around the net, there are hundreds of complaints about this idiotic policy.

  20. Morgan says:

    Greetings,

    I used to work for Paypal around 5 years ago, so I have a bias; still, there was a clear and straightforward process for getting an account unsuspended. I’d be surprised if it’s changed; it usually involved faxing proof of identity, address, etc., documents to Paypal.

    @deb: The answer is that providing a money-transfer service like Paypal is a thousand times harder than building a site like Twitter. You have to integrate with banks and credit card agencies, you have to safeguard people’s money, you have to have split-second response times, and you have to do all of it while fending off the VERY bad people who want to use any payment service as a way to siphon money out of other people’s credit cards, checking accounts, etc. Paypal does all of this very, very well.

    The payments industry is littered with the corpses of companies who thought they could do online payments better than Paypal, including services from giants like Citi and Western Union. Fraud killed them all.

    Paypal is who they are, and in the position they are, because they survived the white-hot inferno of fraudsters, and won. Google is just now learning how hard it is to be in the ‘low hanging fruit’ position.

    Paypal went overboard in the early days also, which is how they garnered the reputation they have. When eBay bought Paypal, it had under a 0.4% fraud rate. 1.5% is the standard for the industry. eBay said in one earnings call that they were explicitly choosing to back off and accept a higher fraud rate (still under the industry average) in exchange for fewer ‘false positives’.

    Google will eventually do that as well, but I’m betting they’re under heavy fraud fire right now, and they’re hunkering down and not caring so much about the innocent merchants getting caught in the crossfire.

    This is a truly, deeply, hard problem, and nobody soft-hearted is going to make it through that fire.

    – Morgan

  21. No Debt Plan says:

    I read an article on reddit (where I found this article) about a guy who had his AdSense account closed with $700 or so dollars in it. No reason, no warning, and no one at Google could tell him why. So he sued in claims court, Google sent a legal clerk out, and he won plain and simple because they couldn’t tell him why they closed it — not that they didn’t want to tell him, but because they literally had no idea why.

  22. dave says:

    Paypal and google checkout are cheap because they are automated. and Google goes one further by not having any humans anywhere in the loop. you get what you pay for. if Google and Paypal had great onlinetelephone support, the service would cost (much) more. if you want support, use a higher level processor as suggested by some of the other posters.

  23. jorge says:

    Evil? Or Incompetent.

    It’s hard to tell sometimes :)

    "Do No Evil" is soooo far from "Do good".

    There are so many problems with google’s ad-ware, err business model, that it’s hard to believe anyone is surprised anymore.

    Trusting a corporation as if it were "a person" is a always a big mistake. Like trusting "government."

  24. Austin says:

    If you start to google, google’s products and services you’ll find just about everything they offer to business and end users has a policy similar to this one. EVERYTHING. My only suggestion to anyone running a business is to not use them for anything, not for running a domain, not for adsense, not for checkout/shopping. They DO NOT CARE. to them all of these "products" are simply a single engineer’s wet dream of a side project, and if someone manages to score a class action lawsuit, or some serious money, they’ll most likely discontinue the product for everyone else to protect their single source of income. They have a monopoly on search/ad, and they are putting their fingers into every database that wants "free storage as long as they can have a copy".

    right now their money comes from search/ads, in the future it will a lexis-nexis type pay to search every database type structure.

    Everything else is smalltime, and therefore a waste of time. It’s there to show their investors that the billions they’re spending on R&D are creating something than can be publicly shown. Understand that there are other projects which no one is allowed to see, that would scare the shit out of most people.

    There are thousands of people with the exact same story who’ve got little time or patience to blog about it.

  25. Small Claims says:

    You can sue anyone in your local small claims court, including Google, and the filing fee is likely to be $75 or less.

    I’d do it.

  26. Cat Dancer says:

    One thing to do is to contact the Attorney General of Delaware (http://attorneygeneral.delaware.gov/), in your role as a business incorporated in Delaware, and let them know that Google has stolen your money. If they get enough complaints, then they can sue Google for you. :)

  27. Blah says:

    Correction to a comment by another poster:

    In the US, you can sue any CORPORATION that does business your local area in your local small claims court.

    Unfortunately, Americans living abroad (American territories like Guam are not "abroad") do not have this right b/c there simply aren’t any American courts abroad which have jurisdiction over such matters.

    On the bright side, since you live abroad, you can sue Google in any small claims court in the US which is convenient for you to do so.

  28. Shii says:

    What a coincidence… I’m reading Kafka’s The Trial right now.

  29. Brian says:

    Take them to small claims court

  30. I’d like to mention that although it might not be a good replacement for Google Checkout, depending on your needs TipJoy is a pretty interesting service and takes a fresh approach to micropayments.

  31. Becky says:

    Don’t be discouraged from suing them if you don’t live in CA. Because they made a sufficient contact with you personally via the contract you signed, and most likely with other people in your state, you can sue them there.

  32. Clinton Judy says:

    I agree with many of the comments here: Take them to small claims court. As much as I love Google (don’t laugh), you have to do what’s right. They owe you money, they’re not giving it to you for whatever reason, and they need to make it right.

  33. Adam says:

    This same exact thing happened to my checkout account, and I wasn’t even using it for anything.

  34. kgb says:

    Any company that grows to the size of Google is bound to be evil. Sue Google’s ass and get them out of business

  35. larry says:

    big company = bad

    learn it.

  36. Ted says:

    I wonder when the general public will realize that Google has already reached the critical mass that changes a company from one led by principles to one led by money.

  37. DC says:

    Small claims court… use it. If more people actually used small claims court for this it wouldnt happen.

  38. Erik Vorhes says:

    Sounds exactly like what happened to me with Amazon’s "Seller Central" program. They closed it with no warning, and I can’t find out why they think the only account I ever opened with them is associated with one they previously banned.

  39. Elle says:

    @Ted "I wonder when the general public will realize that Google has already reached the critical mass that changes a company from one led by principles to one led by money."

    True that!

  40. TinyApps.Org says:

    Google has ignored their own "Don’t be evil" advice for quite some time:

    http://www.tinyapps.org/weblog/misc/200601280700_goodbye_google_ads.html

  41. TinyApps.Org says:

    Google has ignored their own "Don’t be evil" advice for quite some time:

    http://www.tinyapps.org/weblog/misc/200601280700_goodbye_google_ads.html

    Sorry – the URL is getting mangled by the form parser – here’s a shortened URL: http://tinyurl.com/csjhek

  42. as an alternative (full disclosure: I’m a director) – you might to try being an AsiaPay (http://www.asiapay.coM) Merchant – you need to set up an HK entity though but I don’t think you’ll be having these kind of problems! :)

  43. Matt Cutts says:

    Hi Amy, I’m a software engineer at Google. I don’t know the background on what happened and I don’t work in Google Checkout, but I’ll ask some people about this.

  44. Dan says:

    Hey Matts, how about setting up a response system where you can get some HUMAN help.

    Another suggestion is to set up a "Google Checkout Sucks" channel on Youtube. Usually when you poke that advertising cash cow, Google finally notices.

  45. floobydoo says:

    I’m thankful for your page here, because as I transition into online commerce, I was wondering what service to use. I was once an ebay seler and I’ve had my share of evil with PayPal and I’ve written magazine articles about it, but even PayPal took the effort to communicate, even if they were recalcitrant. This google scenario of yours makes lends weight to my increasing troubling view of google. As someone just said on twitter: "Google will do no evil with your current location,your bank account,known acquaintances, & those bad things you just said on blogger" Amen. I don’t trust them at all anymore. Once google was in business with the chinese controllers and ponied up that limp gotta-do-business argument, I went and read google’s letter to their shareholders, and it plainly says that the needs of the shareholders come first. So that whole Do No Evil thing is only as good as the marketing weight it carries. The moment those two guys sell the thing or cave into pressure, the gloves are off, and WATCH OUT.

  46. Rob says:

    Hi Amy, thanks for the information and I’m sorry to hear about your problems, but maybe with this experience you can help people like myself who are thinking of launching a ‘liitle’ software as a service (SaaS) business online.

    In your experience of launching ‘Freckle’, what do you recommend when it comes to online payments systems?

  47. AntiterroristTaskforce says:

    You’re probably a terrorist! <squeling>You bastards!<squeling>

    Hope you figure something out. :(

  48. Robin says:

    Someone should call Sarah Connor. It’s not SkyNet, it’s Google.

    Just wait untill Google Nukeā„¢ rolls out of Google Labs.

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