Buying links is outside Google guidelines

Can Google distinguish between paid links and natural ones? Matt Cutts tells they can and I believe him:

At the point where people are recommending ways to make paid links less detectable (e.g. by removing any labels or indication that the links are sold), I wouldn’t be surprised if search engines begin to take stronger action against link buying in the near future…

Reputable sites that sell links won’t have their search engine rankings or PageRank penalized–a search for [daily cal] would still return dailycal.org. However, link-selling sites can lose their ability to give reputation (e.g. PageRank and anchortext)

I wonder if not-so-reputable sites will have their Google ranking penalized? In fact, I expect they will. If you sell links that let your customers get more visitor traffic, ask your customers if they don’t mind adding the rel=”nofollow” attribute to the link.