Matters of Interest Part 3

Reviewed By Rabbi Mordechai Shuchatowitz, Head of The Baltimore Bais Din

In previous articles, we discussed the concept of ribbis, which is the paying of interest for a loan. We discussed that a loan is when either money or some other commodity, such as food, is given from a lender to a borrower in order to be spent or consumed by the borrower. If the principal of the loan amount is paid back, and the borrower adds something extra to the principal, that extra is prohibited because of ribbis.

In this article, I will discuss cases that are prohibited in halacha because of ribbis, even though there is no actual loan. These are cases in which a business transaction has taken place and some additional compensation is made for waiting to receive what was committed. This includes both prepayment for items purchased that won’t be received until some time later, as well as to post-payments for items bought on credit and paid for later on. Although such transactions are not an actual loan and do not therefore constitute ribbis d’Orayisah (from the Torah), they are nonetheless assur mid’rabbon (rabbinically prohibited) due to their similarity to ribbis. This is called “agar natar,” which means reward for waiting.

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The Gemara (Bava Metzia 63b) discusses a case in which a seller of wax sells four sheets of wax for a zuz (a currency in the times of the Gemara). For illustrative purposes, we will call it a dollar. The seller stipulates that if you give him a dollar today and then wait a month to receive the wax sheets, he will give you five sheets instead of four. The halacha is that if the wax seller does not have the wax sheets in his possession, this is prohibited because of ribbis. The buyer is advancing the dollar, waiting a month, and getting an extra sheet of wax for his waiting. Because he prepaid the dollar, and waited a month to receive the wax sheets, there is a prohibition of rabbinic ribbis.

Let’s apply this to the following theoretical situation: A publisher, such as ArtScroll or Feldheim, is about to publish a new sefer, which will be finished and released in September. Before the sefer is published, they offer a pre-publication deal of $25 for the sefer. The deal is that the buyer must pay the $25 by June and will receive the sefer in September. Anyone buying the sefer in September will have to pay $30. This would be prohibited as agar natar since the buyer gains $5 for prepayment.

Now let’s change the case. Let’s say ArtScroll or Feldheim has the sefer in stock and wishes to make a prepayment incentive. They offer that if you want the sefer delivered upon payment, the price is $30. However, if you pay now and wait a month for delivery of the sefer, the price is $25. Would this also be prohibited?

Actually, the Gemara states that if the wax seller has the wax sheets now, the deal is permitted. One may give the dollar today and wait a month to collect the wax sheets, thereby gaining one wax sheet. The reason is that, if the seller has the wax sheets, we regard it as if the buyer already owns the item. Even though he waits a month to actually take possession, halacha views it as if the transaction had already occurred, and there is no agar natar – there is no gain for waiting. The Hebrew term for this heter – where the seller has the item now and gives the buyer a better deal for paying early – is yesh lo.

Accordingly, it would also be permitted in the case described above, because the sefer is in stock. It has the heter of yesh lo.”[1]

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Until now we discussed a case of prepayment. Let’s transition to a discussion of a payment made later.

Let’s imagine the following scenario: Reuven has an appliance store. He sells refrigerators, ovens, washing machines, and other appliances. He gives the customer the option to buy on credit. However, the price will be higher for a credit sale. For example, he will sell a refrigerator for $800 if the customer pays in full at the time of purchase. If the customer wishes to have more time to pay, he will allow the customer to take possession of the refrigerator immediately and pay six months later. However, he stipulates that for a credit purchase, the price at the end of six months is $1,000.

In this case, the seller is “waiting” six months to collect his money for the sale of the refrigerator. The money is due to the seller at the time of the delivery of the refrigerator. His “reward” for waiting six months is that he gets to collect an extra $200 from the buyer. This is indeed an issue of rabbinic ribbis, as the seller is gaining by waiting to collect on his sale.

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There is a third case that the Mishna (65a) addresses, where a renter receives a discount for prepayment of rent on a property. We have discussed that prepayment for an item being sold will be forbidden because of ribbis, unless the seller actually has the item in stock. Is a discount for prepayment of rent also forbidden? This question could apply to prepayments to camps, schools, and contracted services as well, and is a topic that we will discuss in a future article, b’ezras Hashem.

Rabbi Rosenfeld is the administrator of the Baltimore Bais Din. He can be reached at RYR@baltimorebaisdin.org.