Ribis- Store that offers cheaper price for cash up front.

Question:

Is an early bird discount a ribis problem? as well as full upfront payment discount? If it depend how it’s presented then the details are;
If you make a one-time payment the price is $700.00 or 4 monthly payments of $200.00.

Answer:

Thank you for your question.

For clarity sake, my understanding of your question is that the first option is to pay up front at the time that you receive the product, (and not beforehand), and the second option is to give payments after the product was already purchased.

For you to take the second option is problematic, because when you got the product, you now owe the storeowner $700. If you pay him more than that because the payments are spread out, that is ribbis, and problematic. You may not pay it and the storeowner may not keep the extra $100. Unfortunately, many Jewish storeowners don’t know this halacha, and if possible, they should be told this.

There is however an option for the storeowner to do, but it is a delicate idea and it has to be done correctly. The idea is to remove the two-price option. It is done like this. First of all, he should not advertise that there are two different prices, but advertise that the price is 4 payments $200 each. Then, if someone comes over to him and says that he wants to pay all the money upfront, then he should tell him, “if I give you the cash offer, you will not have the option of payments”. If the person agrees, then it is fine, and he can tell him the cash price. The reason for this is because now there aren’t two options, the only option he has is cash for $700.

(Just add to this. If the customer, will then say, “no, changed my mind and I want to make payments”, then the store will have to give it to him for the cheaper price even if it will be in payments – $700 in 4 payments).

Best wishes

Sources:

Yora Deah siman 173 seif 1 and 3, Teshuvos R’ A. Eiger 51, Har Tzvi Y:D 131, Bris Yehuda 22 ftnt. 13, Toras Ribbis 3-2. The solution of how to make the sale correctly is from Rav P. Vind Shlit”a.