Guaranteed Low Prices and Interest: Difference between revisions
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→Buying on Credit when the Price is Unclear
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#Generally it is forbidden<ref>Rambam Malveh Vloveh 8:1 clarifies that it is only rabbinically forbidden to charge more for buying on credit since it is presented as a sale not a loan. Shach 173:4 agrees.</ref> to charge someone extra for buying on credit.<ref>Gemara Bava Metsia 65a, Shulchan Aruch Y.D. 173:1</ref> | #Generally it is forbidden<ref>Rambam Malveh Vloveh 8:1 clarifies that it is only rabbinically forbidden to charge more for buying on credit since it is presented as a sale not a loan. Shach 173:4 agrees.</ref> to charge someone extra for buying on credit.<ref>Gemara Bava Metsia 65a, Shulchan Aruch Y.D. 173:1</ref> | ||
# If an item doesn't have a fixed price then one can charge more for it when the buyer pays later than the delivery date. The reason is that since there's no established price the seller can set the price of the item at the higher price that the buyer will pay later. However, if there is a market price that is known<ref>Tosfot b"m 63b, Rosh b"m 5:22</ref> or the seller specifies a price for the item if one wanted to pay now and another price for buying on credit it is forbidden.<ref>Gemara Bava Metsia 65a</ref> Therefore, having a two tiered pricing system for buying regularly and buying on credit is interest and forbidden between two Jews.<ref>Shulchan Aruch Y.D. 173:1</ref> | # If an item doesn't have a fixed price then one can charge more for it when the buyer pays later than the delivery date. The reason is that since there's no established price the seller can set the price of the item at the higher price that the buyer will pay later. However, if there is a market price that is known<ref>Tosfot b"m 63b, Rosh b"m 5:22</ref> or the seller specifies a price for the item if one wanted to pay now and another price for buying on credit it is forbidden.<ref>Gemara Bava Metsia 65a</ref> Therefore, having a two tiered pricing system for buying regularly and buying on credit is interest and forbidden between two Jews.<ref>Shulchan Aruch Y.D. 173:1</ref> | ||
#Even when there's no clear price, the market hasn't established a price, and the seller didn't specify a price, the seller can only increase the price a little. There is a dispute as to this amount: | |||
## Some say that the seller can only raise it to an amount that one could expect the price to rise by the time of the payment date. For example, if it is known that in the rainy season the price of umbrellas rise, and the price of umbrellas weren't fixed in the market, then one could have someone pay the price of the rainy season even though the umbrellas were bought in the dry season and they were delivered then. One couldn't charge a higher rate that wouldn't be expected to be the price of the market. We are strict for this opinion.<ref>Baal Hatrumot 46:4:30 citing Ramban 65a s.v. amar, Rabbi Akiva Eiger 173:1, Shach 173:5, Chelkat Binyamin 173:28</ref> | ## Some say that the seller can only raise it to an amount that one could expect the price to rise by the time of the payment date. For example, if it is known that in the rainy season the price of umbrellas rise, and the price of umbrellas weren't fixed in the market, then one could have someone pay the price of the rainy season even though the umbrellas were bought in the dry season and they were delivered then. One couldn't charge a higher rate that wouldn't be expected to be the price of the market. We are strict for this opinion.<ref>Baal Hatrumot 46:4:30 citing Ramban 65a s.v. amar, Rabbi Akiva Eiger 173:1, Shach 173:5, Chelkat Binyamin 173:28</ref> | ||
## An alternate opinion to the first one is that the seller can charge up to the price that the market sometimes surges to when some event occurs if that event happens on a frequent basis.<ref>Chelkat Binyamin 173:28 citing the Sama 173:30 based on Rama 173:1</ref> | ## An alternate opinion to the first one is that the seller can charge up to the price that the market sometimes surges to when some event occurs if that event happens on a frequent basis.<ref>Chelkat Binyamin 173:28 citing the Sama 173:30 based on Rama 173:1</ref> | ||
## Some say that the seller can raise it up to 20 percent above the range of prices in the market. If this is a stringency we follow this opinion.<ref>Chelkat Binyamin 173:28</ref> | ## Some say that the seller can raise it up to 20 percent above the range of prices in the market. If this is a stringency we follow this opinion.<ref>Chelkat Binyamin 173:28</ref> | ||
# If something doesn't have a clear price and the market price fluctuates frequently even if there is currently a market price it is considered eligible for the leniency of charging more for buying on credit as long as the seller doesn't specify a price for purchasing it up front.<ref>Chavot Daat 173:3, Chelkat Binyamin 173:31</ref> | # If something doesn't have a clear price and the market price fluctuates frequently even if there is currently a market price it is considered eligible for the leniency of charging more for buying on credit as long as the seller doesn't specify a price for purchasing it up front.<ref>Chavot Daat 173:3, Chelkat Binyamin 173:31</ref> | ||
'''''Paying in Advance''''' | '''''Paying in Advance''''' | ||
#Generally it is forbidden to sell something for cheaper when the buyer pays in advance.<ref>Shulchan Aruch Y.D. 173:7</ref> | #Generally it is forbidden to sell something for cheaper when the buyer pays in advance.<ref>Shulchan Aruch Y.D. 173:7</ref> | ||
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* Chavot Daat 173:11 there’s no shiybud haguf here if you give them a specific item, but there is for the general fruit which you can give them any fruit. | * Chavot Daat 173:11 there’s no shiybud haguf here if you give them a specific item, but there is for the general fruit which you can give them any fruit. | ||
* Rav Chaim (on shas n. 75 cited by Mesivta Yalkut Mefarshim b"m 63b p. 60) explains that once the commodity is promised to the supplied even though he doesn't own it it is partially yesh lo and we're not concerned about the price fluctuation. | * Rav Chaim (on shas n. 75 cited by Mesivta Yalkut Mefarshim b"m 63b p. 60) explains that once the commodity is promised to the supplied even though he doesn't own it it is partially yesh lo and we're not concerned about the price fluctuation. | ||
* Chelkat Binyamin 173:108 concludes that one can be lenient like the Bear Hagolah's approach and generally give a prepayment to receive more if the price of the item isn't readily determined and isn't going to become readily determined by people.</ref> | * Chelkat Binyamin 173:108 concludes that one can be lenient like the Bear Hagolah's approach and generally give a prepayment to receive more if the price of the item isn't readily determined and isn't going to become readily determined by people.</ref> Even so if the seller specifies that if you pay in advance there is one price and a higher price when buying later it is forbidden.<ref>Rama 173:7</ref> Additionally, if the price difference clearly indicates that it is because of interest it is problematic. The amount that is considered a small amount and not indicative of interest depends on the type of merchandise and the market. If it frequently is on sale then having a prepayment for that sale price is permitted since it doesn't look like there's a cheaper early price because of interest.<ref>Chelkat Binyamin 173:110</ref> | ||
# It is forbidden for the perspective lender to counter the request of a loan with a subterfuge of having the lender borrow a commodity to then resell it to the lender for a cheaper price. Since the borrower originally requested a loan the borrower may not sell the commodity for a cheaper price when when the price is unclear in the marketplace.<ref>Taz 163:6</ref> | # It is forbidden for the perspective lender to counter the request of a loan with a subterfuge of having the lender borrow a commodity to then resell it to the lender for a cheaper price. Since the borrower originally requested a loan the borrower may not sell the commodity for a cheaper price when when the price is unclear in the marketplace.<ref>Taz 163:6</ref> | ||
# If the buyer's intention is purely to buy the item on credit in order to sell it immediately for a cheaper value that is considered a prohibited since it as though the cheaper price is stipulated as the value of the loan and yet he agreed to repay a higher amount.<ref>The Ritva b"m 65a cited by Bedek Habayit 173 writes that if someone purchases a commodity on credit it is permitted if the price isn't clear. However, if the buyer immediately sells it for less it shows that the loan obligated him to pay more than the value of the item and is interest. Chatom Sofer YD 137 follows the Ritva and writes that one can't bring a proof from Shulchan Aruch 163:3 or Taz 163:6 who imply otherwise since they didn't have the Ritva.</ref> | # If the buyer's intention is purely to buy the item on credit in order to sell it immediately for a cheaper value that is considered a prohibited since it as though the cheaper price is stipulated as the value of the loan and yet he agreed to repay a higher amount.<ref>The Ritva b"m 65a cited by Bedek Habayit 173 writes that if someone purchases a commodity on credit it is permitted if the price isn't clear. However, if the buyer immediately sells it for less it shows that the loan obligated him to pay more than the value of the item and is interest. Chatom Sofer YD 137 follows the Ritva and writes that one can't bring a proof from Shulchan Aruch 163:3 or Taz 163:6 who imply otherwise since they didn't have the Ritva.</ref> | ||
