Online sellers are often start-up’s who need a way to accept credit cards but do not want to go through the headaches involved in setting up a merchant credit card account. Using an online credit card charging service is much easier. Most services allow you to create a simple buy-now link that you can place on your website. You can sign-up and start selling your product in minutes.
But wait, it is not so simple.
Usually when Google develops a system, they test it. They have done an excellent job with their Adwords and Adsense systems. These are well researched and the people running them are very knowledgeable.
That is why I was surprised to find that Google Checkout is so poorly designed.
Here is a Comparison.
When you purchase through PayPal using a credit card, you have a clearly stated buyer protection policy and PayPal makes it easy to file for a refund if you do not receive your order. This is not the case with Google Checkout. Once you send a payment using Google Checkout, there is no facility to file a complaint for non-receipt. On the order page for Google Checkout, there is no mention of any buyer protection or fraud prevention. That is because there is no protection. They force you to contact the vendor and if the vendor is unwilling to ship the item you paid for, you have no other recourse than to file for a charge reversal with your credit card company. If you have filed for a reversal before, you know what a pain that can be plus you then have to cancel your card and wait for a new card to arrive.
Here is a typical scenario. I purchased a DVD video set from uBid which uses Google Checkout as their payment processor. My card was charged and I received a message the next day with a USPS Priority Mail tracking number. Three weeks later I still did not have my DVD set. A check on the tracking number showed that my order was never shipped. I went to my Google account and that is when I realized there were no buyer protection options.
The only option I was given was to contact uBid. I did that. Three days later they had not responded. I then went to the uBid site and tried to contact them through their web form as instructed. When I completed the form and clicked Submit, I received a big red letter message saying they did not accept Google Checkout inquiries. After some web searching, I see uBid has a history of failing to ship purchases. During my checkout from uBid using Google Checkout, I also was presented with a box asking if I wanted to receive promotional offers from uBid. I did NOT check the box, but two days later I started receiving spam anyway. I had to wonder why they bothered to ask if they planned to spam me anyway.
When I realized I was not going to receive my order, now 4 weeks after I paid, I returned to Google Checkout and spent more than half an hour going through their help system trying to find out how to report a fraudulent charge(I paid but they will not ship or respond to customer service messages and that is fraud).
If I had used PayPal, 2Checkout, ClickBank, or any other service, I would have had some protection and could have requested a refund. The seller is unwilling to resolve the matter and Google has no facility to report fraud or to authorize a refund.
This puts the buyer in a very weak position.
On a side note: Google Checkout has a number of other disadvantages for online marketers. They do not offer any type of managed affiliate program. Since Google is making the actual charge, they should also offer a managed affiliate system similar to ClickBank, but they failed to include this common feature. Any good online marketer uses affiliates. The absence of this feature is stunning to me.
As an online marketer myself, I would be afraid to even offer Google Checkout.
The inability for customers to file a complaint against bad merchants makes it a perfect tool for dishonest marketers and I do not want my sales websites associated with that stigma.
I have a Google Checkout merchant account. I did test it but after finding all the shortcomings, I quit using it long ago. Now that I have discovered how the system works from the buyer’s side, I know I will never offer it as a payment option again.
Online marketers must carefully evaluate the companies they use to process payments. If a large number of buyers have a bad experience with Google Checkout, then you can bet they will be less likely to trust your website when they see a Google Checkout logo. They will know that they have no real buyer protection and will either avoid your site completely or look for an alternate payment method(Such as PayPal which gives them the most control and they do not have to share their credit card number).
Many marketers pick a credit card processing company based on what it does for THEM. You must also think about what it does for your customers.
For example, Digital River’s Swreg software sales service offers a great deal for online sellers. At least it appears great. It is easy to setup, you can create links to place on your site that your customers use to pay by credit card. Sellers have the option to pay 2.9. Which do you think most marketers will choose? Right, they will pick the 0 is not the best option for buyers or sellers. In order to obtain this special low price package, Swreg adds an $8 charge to every shopping cart purchase. This charge is for a software backup service. Most sellers of software already offer this service for free but there is no way to remove the extra charge by the seller. That means when you try to sell your $19.95 software, the customer clicks through and they are immediately charged $27.95. The price just jumped almost 30%. The seller does not see one cent of this $8 fee. When customers need to re-download, they usually contact the seller and not Swreg so the customer paid extra for a service and the seller is the one who must provide the service, uncompensated, while Swreg pockets the $8.
Some customers will remove the extra charge from the shopping cart, but most will think they are being gouged when the price shoots up and they will click the back button to find the next company offering a similar product. The end result is that the seller has generated bad will with a customer and driven away a sale.
Choosing the best selling option for the seller is not always the best option for the buyer. If it is not the best option for the buyer, then it is never the best option for the seller because it means lost sales.
Many of these services will also charge outrageous fees for normal course-of-business services, make unexpected additions to your shopping cart, spam your customers with their own offers, or offer related items from your competitors automatically on the checkout page. Once the buyer clicks another offer, they are unlikely to return and finish purchasing from you.
You must be very careful when choosing a payment service. Choosing a Digital River related site could result in lost sales due to unexpected items appearing in the cart or spam. Using Google Checkout can also damage your sales because once a customer is burned using them, they will remember that they have no buyer protection and never use the Google Checkout service again.
Always research a payment processing company from the buyer’s perspective. Make sure you place a real paid(not a test) order and use a special email address that you can monitor for spam abuses. You want to know how the company really works before sending your hard-won customers to their site. Look at the order process through the buyer’s eyes. Pretend you have never seen the order page before. Is it confusing, are there any distracting offers that may lead a buyer to buy something other than your product? Are there any unauthorized items automatically added to the buyer’s cart? Is there a clearly stated buyer protection offer or link?
If you were the buyer and you are not willing to order from your own site, then customers will not be willing to buy either.