Risk and variants
Advance payment means the payment is made in full before the goods are shipped or handed over, usually by bank transfer, less often by instant transfer or other real-time payment methods. Advance payment is a legal, widely used payment method that reputable merchants also offer, for example for international orders or customers without a credit check.
Reputable merchants offer advance payment too, and for good reasons. For custom-made items, very large orders, deliveries abroad or new customers without a credit check, advance payment is a common and objectively justified arrangement. A shop only stands out when advance payment is the only option and nobody will explain why.
Advance payment becomes problematic when it is the only payment method offered. Unlike a card payment or PayPal, a classic bank transfer is practically impossible to reclaim once it has been credited to the recipient; there is neither a chargeback procedure nor buyer protection. That is why “advance payment by bank transfer only” is, according to consumer advice centres, by far the most common payment tactic in reported fake shops: the money is transferred, the goods never arrive, and a refund via the bank is barely enforceable in practice.
“Advance payment” covers several variants with very different levels of risk. A classic transfer can, in rare cases, still be stopped as long as it has not been executed. An instant transfer is credited within seconds. An attempt to reclaim it is then practically hopeless. More delicate still are payments in cryptocurrency or via gift cards whose codes are requested by phone or email: both are final and anonymous. Anyone asking for prepaid cards is, with very high probability, not a merchant.
Patterns at fake shops
A widespread pattern is the switch of payment method in the middle of the ordering process. On the product page and in the basket, the logos of PayPal, Klarna and credit cards are on display. At the final checkout step, only “bank transfer” is left, often with an excuse such as “technical fault at the payment provider” or “first orders only”. Sometimes the bank details only arrive by email after the order. This break between advertising and checkout is a reliable warning sign.
Another pattern is artificial time pressure: “payment within 24 hours or the reservation expires”, or a countdown next to the basket. The purpose is always the same: to take away the time in which you would check the legal notice, the reviews and the domain age. Reputable merchants have no interest in your paying in haste; their margin does not depend on a single order.
Checks before a transfer
Anyone who still wants or needs to pay by transfer should not execute the order on trust. Check beforehand whether the recipient name matches the company from the legal notice letter for letter, whether the reference contains a traceable order number, and whether the bank details are the same as on the website. If a shop changes its account details from order to order or only supplies them in a follow-up email, that is an alarm signal.
The recipient details themselves are revealing too. Does the account holder match the company name from the legal notice, or is it a private individual? Is the account in a country that fits neither the company seat nor the domain? Neither is proof in itself, because payment service providers with accounts in other EU states are common. Still, check the combination of an unfamiliar name, a foreign account and advance payment only thoroughly before money moves.
It also makes sense to check the recipient IBAN against already known fraud reports before paying. If the account shows up there, no further deliberation is needed. If it does not, that is no all-clear, because most accounts have no report on file. The check costs nothing, though, and can, at best, prevent the entire loss.
After the transfer
If the transfer has been initiated but not yet executed, an immediate call to the bank or a look into online banking is worthwhile: scheduled transfers and orders not yet processed can sometimes be cancelled. If the money has already gone, the recall via your own bank remains. It is not guaranteed, but the faster it is triggered, the greater the chance that the recipient account has not yet been emptied.
With an unfamiliar shop that demands advance payment exclusively and does not offer common payment methods with buyer protection such as PayPal or credit card, caution is warranted, all the more so in combination with strikingly low prices. If money has already been transferred, every hour counts: inform your own bank, ask for a recall, secure your evidence and file a report with the police.