Responding to customer complaints, Google Inc. (GOOG) has decided to offer full refunds to users who had bought video through a service it is shutting down.

The company initially planned to give only credits through its nascent Google Checkout offering, requiring people to make a purchase for coffee, magazines or other items sold by merchants who accept Checkout payments.

"When your friends and well-intentioned acquaintances tell you that you've made a mistake, it's good to listen," Bindu Reddy, Google's video product manager, said on the company's official blog.

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Reddy said Google had considered giving full refunds but decided against it because it wasn't sure it had the latest credit card information and other data needed to process them.

"We thought offering the refund in the form of Google Checkout credits would entail fewer steps and offer a better user experience," Reddy wrote. "We should have anticipated that some users would see a Checkout credit as nothing more than an extra step of a different (and annoyingly self-serving) kind. Our bad."

So Google will now offer full refunds and urged users to update their Google accounts with the latest credit card information. It is also letting users keep the Checkout credits offered.

Google also is extending through February 2008 the ability to view video already purchased, although it has stopped letting people buy new ones. Before, the video would have expired Aug. 15.

Company spokesman Gabriel Stricker would not say how much the refunds would cost, but said they won't materially affect the company's finances.

He also described the number of complaints as "limited."

Google decided to shut its service for selling and renting online video, given the popularity of free clips on other Web sites, including the Google-owned YouTube. Google Video will continue to offer free videos, but no longer sells programs.

The move lets Google focus its energies on making money from video advertising. On Wednesday, Google launched a program for displaying semitransparent "overlay" ads at the bottom of selected YouTube clips; viewers can click on the overlay to launch the full pitch.