Google Admits to, Fixes Video Refund Gaffe

Everyone loves a good mea culpa and posted a big one on its Google Blog site August 20.

Seems the company underestimated the firestorm of complaints it would trigger when it discontinued its download-to-own/download-to-rent feature for its Google Video service, meaning the videos customer bought would no longer be playable.

Customers were offered a refund or credit via Google Checkout, depending on how long ago they bought a video. Credit card refunds were provided for customers who purchased after July 18, but Checkout credit was provided for those who bought before that time, to account for any changes in billing information.

This is where Google erred, as Google Video Product Manager Bindu Reddy said in his post that "we should have anticipated that some users would see a Checkout credit as nothing more than a an extra step of a different (and annoyingly self-serving) kind."

To make amends (and try to keep these customers from hating Google forever and fleeing to Amazon's Unbox or some other video service), Google is now offering full refunds. Moreover, those who already received Checkout credits will get to keep them. Perhaps the best point of customer victory here is that Google Video will let customers keep playing those videos for another six months.

Google is offering a lot here to atone for what Reddy described as a habit of moving too quickly, which led to this "mistake." Google could maybe go them one better and promise to keep the feature, but that is counter to their plans.

See, the company, along with its YouTube unit, wants to generate money via video in a way that hews more to its traditional model: by selling ads. It just isn't sure how it wants to do that yet. A Google spokesperson told me last week that Google Video and YouTube engineers are huddling on how to make this model take off.

But the search portal could pay a big price for the quick and callous manner in which it made its decision to dispose of DLO/DLR. When the company does come up with a video rental/buy model that suits its business needs, it may have to offer the customer even more to win back trust, if that's even possible.

Instead of, say, offering one free video for every five movies rented, the company might have to make it three. Instead of a $5 coupon for x $ amount spent on purchasing videos, Google might have to make it $10 or $15.

Reddy tried to put a self-congratulatory spin on Google's attempt to rectify the error, noting that the "very least that our customers should expect from us is that out mistakes be new an innovative, too. ;)"

But customers won't look at it that way. If they come back at all, they certainly won't come back to applaud the way Google can fess up to messing up. They will demand a superior product at a better price than what Amazon, Netflix and Blockbuster offer.

Google has apologized, accepted responsibility for its actions, and tried to remedy this problem. But now the onus is on Google to deliver a service it can be proud of and, more importantly, one users can adore.