There has been a significant influx of merchants submitting their logos to Google Merchant. Submitting your logo to Google Merchant Center is beneficial as it will be used in display, showcase ads, shopping actions, local inventory, etc.
When submitting a logo, there are some criteria.
In many cases, the logo is unreadable in very small sizes, yes you are submitting a 500*500 square logo, but when Google uses the image in practice, the logo can be as small as 50 pixels. This causes the text to be unreadable.
Here is an example on the left of what most merchants do, and on the right, what you should do.
If you would use the left image, you will start having trouble reading the brand name.
If you rearrange the logo to make it bigger, it becomes easier to read.
Incorrect aspect ratio
Make sure your image is 100% square (500*500 pixels) or for the rectangle logo absolutely 2:1 (1000*500 pixels) And not 999*500 pixels.
You can check the size of your image:
Windows : Find your image > right click > properties > in the popup select the details tab
Mac : Find your image > ctrl+click > get info
Remove any watermarks
As much as you like to protect your intellectual properties, you can’t have any watermarks.
The background must be white or transparent