An online merchant system provides a merchandise trade-in program that includes advance payment for items traded-in by qualified customers. When a request to trade-in an item is received from a customer, a determination is made as to whether an advance payment can be made for the item. If an advance payment can be made for the item, an advance payment for the total estimated trade-in value of the item is made to the customer. The advance payment may be made prior to shipment of the item to the merchant or when the merchant is notified that the item has been shipped. When the item is received by the merchant, the customer is debited if the actual value of the item is less than the advance payment and credited if the actual value of the item is more than the advance payment.