By Rabbi Yair Hoffman for the Five Towns Jewish Times

You ordered benchers for your daughter’s wedding. The vendor tells you that the price is $1100, and that you do not have to pay until a month after the wedding. He then states that if you pay cash now, he will give you the benchers for $900.

Is our case with the bencher maker’s cash discount a halachic problem of Ribis? One definition of Ribis is – “interest payment for credit extension.” The Shulchan Aruch (Yoreh Deah 173:1) tells us that it is forbidden to have one price for cash and one price for credit. The issue, of course, is not limited to benchers, but extends to any vendor or business. It would thus be prohibited to state: “The price is $1100 for a credit purchase. If, however, you pay now, I will only charge you $900.”

The Shulchan Aruch states, however, that the prohibition is only in regard to items that have a generally set price. He further qualifies it by saying that when there is no generally set price he may not actually verbalize the price difference. As a general rule, the prohibition under discussion is a Rabbinic violation rather than a biblical one.

SERIOUSNESS OF THE ISSUE

Before we get into the details, however, let’s examine how serious the issue of Ribis actually is. The Maharal in Nesivos Olam (Nesiv HaTzedakah #6) tells us says, that there is no other prohibition which has been described in such a serious a manner as the prohibition of ribis.” The Gemorah (Bava Metzia 71a) tells us that one who loans out money with ribis becomes poor on account of it and never recovers. A good parable as to why it is so serious can be seen in the following story.

A father has two sons, Reuvain and Shimon. Shimon is living abroad and Reuvain is living locally. Shimon is not making it financially and comes to look for a parnasa. Reuvain takes him into his house. After a week, Reuvain presents Shimon with a bill for $40 per night. Wouldn’t the father be angry? The same is true here. Jews are all brothers to each other and charging a family mmber interest is completely forbidden.

THE GRAY AREA

When there is a clear market price for the item and the vendor is charging that price for the item, but he is giving a lower price for cash – then we have a debate among the Poskim.

THOSE WHO PERMIT

The Chochmas Adam (139:5) and the Machaneh Ephraim (#31) as cited by Rabbi Yisroel Reisman in his Halichos Yisroel (page 115) both rule that it is permitted when the cash price is below the market cost. The rationale is that the vendor is not charging more for credit – he is charging less for cash.

THOSE WHO FORBID

The Pischei Teshuvah (173:5) cites the Tiferes L’Moshe who states that it is forbidden even if the cash price is below market price. The rationale he provides is that since he is willing to accept the lower price, the fact that he is accepting the higher price for giving it on credit makes it “interest payment for credit extension.”
Others who forbid it even when the cash price is below the market price are the Yad Avrohom (173:1), The Rav Shulchan Aruch (173:18), the Mishneh L’melech on the Rambam, Hilchos Malveh (8:1), the Maharam Shick (YD #163), the Imrei Binah (#2), the Imrei Yosher (1:149) and the Bris Yehudah (22:7). Rabbi Reisman concludes that one should be stringent according to those who forbid it.

WHAT ABOUT A CHECK?

Believe it or not the Bris Yehudah also equates a check with credit. The Sefer Bris Yehudah (2:3) rules that a check is also considered a loan – even if the date is not post-dated, since there is a loan that is actually happening, whenever someone takes a check. A check is a letter of instruction to one’s own bank to make a payment to the bearer. Technically, this would be just another loan. There is no minimal time limit on a loan.

CREDIT CARD

It is this author’s understanding that credit card companies also do not credit a retailer’s account immediately when the card is processed. Thus, if they credit the retailer’s account overnight, this too may constitute a type of loan. In such a situation, it would also appear problematic to offer the customer the cash versus credit card discount according to the latter Poskim.

BACK TO THE BENCHER CASE

So it would, at first glance, seem that the bentcher case is forbidden. In the particular case under discussion, however, the cash discount statement was only made after the wedding had taken place and after the bentchers were taken. Once the bentchers were taken this is considered as a kinyan in the eyes of halacha. Once a kinyan has been made, the Ramah (in 173:3) permits the statement of giving a discount for cash now. This also applies to another form of kinyan even if the buyer did not yet take physical possession of the item.

2/10 NET 30

While we are on the topic, there is a common business practice called 2/10 Net 30. This means that if a person (usually a business) submits payment of an invoice within ten days of the invoice – they receive 2 percent off of the bill. Thus, if a bill is $5000, if he pays within ten days of the invoice, he would only have to pay $4900. The NET 30 means that the entire bill must be paid within thirty days.
Most Poskim prohibit the practice of 2/10 when it is between Jewish vendors because of the halacha mentioned above.

CONCLUSIONS

The issue discussed here is one that affects numerous businesses that deal with Jewish suppliers and customers. Ribis is a serious issue – even if it is just Rabbinic Ribis. Please discuss any questions you may have in this regard with your Rav or Posek.

The author can be reached at [email protected]

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