Interest-Free Sleep

Question

Benny, of Benny’s Best Bedding Store, wishes to try
to boost sales with a special promotional offer: Try any bed or mattress
for two weeks. If your slumber is not sweet enough, you can return the bed
(as long as it has not been damaged) and receive a full refund. However,
since Benny is always concerned that his business dealings should be
strictly in accordance with the halochoh, he first consults with
his rabbi. Does such a transaction present any problems?


Answer

The Shulchan Oruch (Yoreh Deah 174:1)
rules that if a person sold his land on condition that he has the right to
refund the money to the purchaser and have the land returned whenever he
is able to do so, the transaction is invalid. Indeed, if the purchaser
used or ate the fruits of the land in the interim, the Shulchan Oruch
is of the opinion that this constitutes ribbis k’tzutzah
(fixed interest). Since the Torah forbids such interest, if it was paid, Beis
Din
has the right to demand its return. Thus, we see that such a
transaction is not viewed as a genuine sale. A person who sells a field,
gives up all rights to his former property. The fact that this seller
wishes to retain enforceable buy-back rights shows that he has not severed
his connection with his property. We therefore regard him as having
borrowed the money from the “purchaser”, giving him use of the bed in
return for the loan. This is classified as forbidden interest. However, it
is possible that the seller will never find the money to redeem his field.
We will then know in retrospect that the sale was fully valid. Why do we
say that the sale is invalid from the outset? The Taz points out
that this is only considered ribbis k’tzutzah according to the
opinion that even making an arrangement where there is a possibility of
interest being payable is forbidden (tzad echod b’ribbis). The Shach
holds that such a transaction does not violate a Torah prohibition, but is
only avak ribbis (a secondary prohibition). The Shulchan Oruch
Harav
(of the Ba’al HaTanya, No.55) states that the same rule
applies if the purchaser is the one who makes a condition that he
can return the goods against a full refund at some later date. Once again,
since it is possible that he will take advantage of this right, we deem
this transaction as being a loan on interest, the interest payment being
use of the goods.

We can therefore conclude that it is forbidden for the
purchaser to make use of the goods he has bought as long as he has a right
to receive a full refund against return of the goods. Should he make use
of them and then return his purchase, he will have violated the
prohibition of receiving interest – and the seller that of paying ribbis.
However, if the seller does not use the money he received in exchange for
the goods (or does not deposit the payment cheque in his bank account), he
is not considered as having received a loan. He merely sold the goods on
condition that the purchaser could receive a full refund if he was not
satisfied with his purchase within a certain period of time. The purchase
price was deposited with the seller until such time as the fate of the
transaction would be decided. Furthermore, if the purchaser does not
receive a full refund on returning the goods, he may even use the goods.
We regard the difference in payment as a rental charge for use of the
goods. Since the purchaser/lender paid for use of the goods, he has
received no payment for the loan and no ribbis problem exists.

Another solution is for the seller to stipulate that
the present sale is full and final. However, should the purchaser not be
satisfied with his purchase, he would probably be prepared to buy the
goods back from the purchaser. No binding commitment is made to buy back
the goods. Since this involves two separate transactions, no prohibition
is infringed.