Many online sellers know all too well the perils of "buyer fraud." eBay's online payment service PayPal has implemented policies to try to reduce sellers' exposure to this kind of fraud, which can include false claims of non-delivery and credit-card chargebacks. And when Google launched a checkout service for online merchants, it too tackled the problem of buyer fraud through its Chargeback Resolution Policy. (Note that as of this writing, eBay bans sellers from using Google Checkout on eBay transactions.)

Google's Chargeback Resolution Policy is quite short and states, "As part of Google's Chargeback Resolution Policy, Google will evaluate all chargebacks you receive and, whenever possible, fight them on your behalf. If the chargeback is successfully disputed, Google will reimburse you. In addition to our Chargeback Resolution Policy, Google also offers the Payment Guarantee Policy, which extends even more chargeback protection to you for eligible transactions."
http://checkout.google.com/support/sell/bin/answer.py?answer=38147

It's well worth reading the Seller Terms of Service if you want more details on Google's Chargeback Resolution Policy (https://checkout.google.com/termsOfService?type=Seller). According to the terms, sellers acknowledge and agree that Google is not responsible for disputes with buyers, though Google does provide tools to assist buyers and sellers to communicate with each other. If buyers and sellers are unable to resolve a dispute, Google may mediate disputes upon either party's request for assistance. Google will then review the dispute and propose a non-binding solution, if appropriate (see Section 4.5 of Terms of Service).

Google requires that sellers disclose their return/cancellation policy to buyers. However, if a seller's refund policy prohibits returns under certain circumstances, the seller may still receive a chargeback on the transaction (see Section 6.4 of Terms of Service). And in Exhibit A in the section titled "Refunds and Adjustments," Google explains that Card Associations require sellers to maintain a fair policy with regard to returns and cancellation of merchandise or services.

Google uses standard credit-card industry AVS and CVS practices to avoid fraudulent activity, and utilizes fraud detection techniques, which you can read more about on its FAQs page (http://checkout.google.com/support/sell/bin/answer.py?answer=38145&topic=8666).

Google Checkout merchants can view AVS and CVS information themselves. (PayPal sellers don't have access to AVS and CVS unless they are Website Payment Pro or Virtual Terminal customers.)

Google's Payment Guarantee Policy
Google's Payment Guarantee Policy extends additional chargeback protection to sellers for certain, eligible transactions, and is in many ways similar to protections offered sellers by PayPal in its Seller Protection Policy. The accompanying chart compares the two policies.

Google Payment Guarantee Policy
http://checkout.google.com/support/sell/bin/answer.py?answer=42863

PayPal Seller Protection Policy:
http://www.paypal.com/cgi-bin/webscr?cmd=p/gen/ua/policy_spp-outside

Google Checkout Payment Guarantee Policy versus PayPal Seller Protection Policy
Policy Requirements & Exclusions	PayPal Seller Protection Policy (applies to Verified Business or Premier Account)	Google Checkout Payment Guarantee Policy
Geographic exclusions	Transaction must be between a US, UK or Canadian buyer and a qualified US, UK or Canadian seller.	Google Checkout is currently limited to US merchants only, US dollars is the only valid currency, and shipping and tax features that use regions can only refer to US states and zip codes.
Intangible goods exclusions	Policy does not cover intangible goods, services or licenses of digital content.	Policy does not cover intangible goods such as services and digital content.
Category/item exclusions (such as alcohol, gambling)	See PayPal's acceptable use policy: http://digbig.com/4mejt	See Google's content policies: http://digbig.com/4mejw
SNAD exclusions (items not as described)	Policy does not cover claims of goods that are "not as described."	Policy does not cover claims of defective merchandise or "items not as described
Shipping requirements	Ship to confirmed address within 7 days of receiving payment	Ship to Google-specified shipping address according to the shipping method and timeframe agreed upon when the order was placed.
Proof of shipping/delivery	Proof of delivery-trackable online-for transactions less than $250; Proof of delivery with buyer's signature for transactions greater than $250	Tracking number or proof of shipping for transactions less than $250; Proof of delivery with buyer's signature for transactions greater than $250
Timely response to claims	Respond to PayPal within 10 days	Respond to Google within 10 business days
Display clear return policy on your website	Not required	Required
Amount that service provider will reimburse seller for eligible chargebacks	$5,000/year	$10,000/year or more: if gross Google Checkout sales exceed $1 million per year, Google will protect seller for 1% of those sales.
Indication that policy applies	Payment must be listed as "Seller Protection Policy Eligble" on the Transaction Details page.	Order must be marked "Covered by Payment Guarantee"
Single-payment requirement	Seller accepted single payment from one PayPal account for the purchase.	unspecified on Google website
Chargeback fees	$10	unspecified on Google website
Fraud indicator warnings	PayPal provides AVS and CVV info only to its Website Payment Pro and Virtual Terminal customers.	Google provides AVS and CVV info and account age, see http://digbig.com/4mejy

Google Checkout Integration
Google will share buyer credit verification information for each order received and will indicate whether it is eligible for Google's Payment Guarantee Policy protection. Sellers must sign in, click the order in the order inbox, and the buyer credit verification information will appear underneath the buyer's shipping information. If "Covered by Payment Guarantee" appears, then the order is eligible for such protection.

Sellers can use Level 1 or Level 2 integration when signing up for Google Checkout. With Level 1 integration, sellers receive new order notifications by email, then use the Merchant Center (which they sign into over the Internet) to manage the orders. With Level 2, sellers create a "web service" to handle new-order notifications and all other order communications "programmatically." Level 2 has advanced order-processing features including the ability to handle complex shipping and coupon processing.

Summing Up
Both PayPal and Google say they do their best to detect fraud in advance and share information with sellers. PayPal points to its fraud management system and the "2,000 people devoted to keeping fraud out of the system," proprietary tools, and the PayPal Dispute Resolution, a communications mechanism that brings buyers and sellers together. Google points to advanced risk-modeling, automatic fraud-detection and supplemental manual review.

Sellers who have their own credit-card merchant accounts may be more knowledgeable about the risks of accepting credit-card payments for transactions, but smaller sellers may not. So readers should make sure they fully understand their responsibilities and potential liabilities when using services that facilitate credit-card payments, including Google Checkout and PayPal.