The company angered some Google Video customers who had paid for movies but were locked out when the store was shuttered.
At first, the company offered to refund customers in credit to their Google Checkout accounts. That idea was widely criticized by many as being self-serving. On Monday, Google admitted the "goof" and announced that it would give credit card refunds to anyone who had ever bought a video on the site.
"When your friends and well-intentioned acquaintances tell you that you've made a mistake, it's good to listen," said Bindu Reddy, the store's product manager in a blog post.
In addition to the credit card refunds, those who received Google Checkout credits for videos can keep those as well.
"Think of it as an additional 'We're sorry we goofed' credit," Reddy said in his post.
Google has said that the company wants to concentrate more of its attention on video search and its video-sharing site, YouTube. The company has also not ruled out returning to video-on-demand in the future.