Hershy, of Hershy’s Heimishe Heating Fuel, gives his
clients thirty days to pay their bills, as is the custom in the trade.
Hershy has a cash-flow problem and would like the bank manager to smile at
him once again! Would he be permitted to offer a five-percent discount for
payment within two weeks instead of the usual thirty days, or would this
raise a ribbis problem?
The Shulchan Oruch (Yoreh Deah 173:1)
rules that it is forbidden to sell an item which is valued at ten gold
pieces for twelve because the vendor knows he has to wait for payment.
Since an extra amount is added because of waiting, this transaction falls
under the rabbinic prohibition of agar natar (payment for waiting).
However, the prohibition only applies to items which have a known price or
value. If the price or value is not generally known, one may charge a
higher price for waiting, as long as there is no specific mention made of
this fact when quoting the price. The Shulchan Oruch quotes
an opinion that, even under these circumstances, only a small increase in
price is permitted. The Remo adds that if a particular item rises
in price when the nobility come to town, which is a common occurrence,
then it is permitted to charge this higher price at any time, even if the
reason for doing so is because one has to wait for payment.
What is considered a known price or value? Do we accept
a strict definition that only where the price is rigidly fixed is there a
prohibition of charging extra for having to wait for one’s money?
Accordingly, only where there is government price control may one not sell
above the fixed price. Most other items, where prices do vary – even by
a small amount – would be exempt from this restriction. Alternatively,
one could adopt a broader view, namely, that wherever the public has a
good idea of the value of a particular item, it falls into the category of
having a known value. This would only leave certain rare or custom-made
items as not being of known value. In fact, there is a major difference of
opinion on this issue (see Bris Yehudah, Chapter 22, Note 4). Even
if we adopt the more lenient opinion, it would be forbidden for the
retailer to specify two prices for any item – a lower one for cash and a
higher price for credit. The reason is as mentioned above; even though one
may charge a higher price for an item which does not have a known value if
one has to wait for payment, it is nevertheless forbidden to specify that
this is the reason for the higher price. By mentioning that there is a
lower price for cash, one has in effect stated that the reason for the
higher price is the need to wait for the money! Even if the credit price
is presented as “the real price” and the lower price as “a discount
for cash”, one must take care. Firstly, is this really the case, and
secondly, there are those who forbid such a transaction even under these
circumstances (see Bris Yehudah 22:7). It is very common for prices
to be shown in this manner in furniture and electrical appliance shops.
Unless the shop has a valid heter iska (see “Who is the Real
Borrower?” in this series), one should consult with a competent halachic
authority before entering into such a transaction.
However, our case is different. Since the accepted
practice is that payment is only due after thirty days. Indeed, any
supplier who would demand earlier payment would be looked at with surprise
and would soon lose his customers! We can therefore conclude that when
Hershy offers a discount for early payment, this is a genuine reduction in
price. In effect, he is saying that he is prepared to forego part of the
money due to him in return for ready cash (see Bris Yehudah 22:8).