I'm in the middle of setting up some google checkout stuff myself and from what I could tell the fraud prevention methods were more or less proprietary. They didn't really get into any specifics about what it is they do.
I've used GCO for many purchases/sales here on FM and other venues, including a couple payments from clients. As always, the best advice is tryo to deal only with people who you can ascertain to be at least [relatively] trustworthy.
Seeing as that isn't always an option, here is what I recall, as I haven't read their TOS and FAQ in a while - please double check before taking anything I saw as absolute fact...
If someone pays you with a fake/stolen credit card, Google will cover the loss. If you follow their required shipping practices, (Using tracking and requiring signature release, maybe some other small nitpicks) they'll cover any loss as well.
Do you understand that Google limits how much money you can actually withdraw from your checkout account after you get paid? I believe that you are limited to $500 per month for the freebie account. Great there are no fees. Not so great that all you can do is look at the money on your computer screen.
That is my point. The basic account does have a $500 per month limit. And yes, you can provide your personal credit info if you wish to "upgrade" and remove the limits. I am simply trying to make sure that people know there are limits. There is no free lunch. You must provide both a credit card account and a SSN or the EIN. I am simply a bit cautious about where I toss those things around, especially given Google's history of sharing users information.
