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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review August 11, 2008 / 10 Menachem-Av 5768

A Jewish view on fair pricing

By Rabbi Dr. Asher Meir

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http://www.JewishWorldReview.com | Q: I have a standard price list, but I'm pretty liberal about giving discounts when I need to make a sale. Is this a problem?

A: Adam Smith noted that economic progress is dependent "a certain propensity in human nature," namely "the propensity to truck, barter, and exchange one thing for another". After all, Smith notes; "Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog."

However, people nowadays seem to prefer facing predictable prices over having to haggle over every exchange, and so most sellers today have standard prices which apply equally to all customers.

The Jewish approach to "fair" pricing is very lenient. There is no fair price doctrine in Jewish law, and except for a few regulated staples a seller is allowed to charge any price he likes for his wares. At the same time, the Jewish approach to transparent pricing is very strict. The demand for a transparent pricing policy stems from two distinct though related prohibitions: the prohibition on overcharging, known as onaah, and the prohibition on misleading practices, known as geneivas da'as.

The prohibition on overcharging, or underpaying, is learned from the followi

ng verse: "When you sell to your fellow or buy from the hand of your fellow, don't oppress each man his brother" (Leviticus 25:14). From the context of the verse we see that the "oppression" refers to overcharging, and the rabbis inferred that it applies equally to underpaying. However, this prohibition is breached only when the price deviates significantly from the customary market price without the customer's knowledge. If the seller says, "Other stores sell this object for ten dollars, but I won't sell it for less than 20", there is no onaah. (Likewise if a customer tells the seller, other stores are selling this item for ten dollars but I'm only willing to give you five.) Since the prohibition is contingent on the buyer's reasonable expectations, and can be waived, we see that the main emphasis is on transparency.

A separate transgression is known as geneivas da'as. This is breached when the buyer is misled regarding the price of an object, even if the price itself is fair or even a bargain. A classic case of geneivas da'as in a commercial context would be advertising a product as on sale when it is selling at its usual price, or even advertising "50% off" when there is a genuine discount but it is more modest.

In your case, there is no problem if you generally charge a particular price but once in a while you show flexibility for someone who is needy or particularly stubborn, etc. The average customer is justified in believing that he is paying the going price. Assuming the law allows it, you can also decide to give discounts to a particular class of customers: local residents, college students, soldiers, etc. If you publicize these discounts, then anyone who frequents your place of business knows the score.

The problem is if the exception becomes the rule and you make so many "discounts" that the list price is only for suckers. I was once in a clothing store with a prominent sign saying that all prices are non-negotiable. The sign should have made me suspicious, because normal stores where the prices really are non-negotiable don't have signs like that. Anyway, it turns out that even without any negotiation on my part the salesman offered me "discounts" on everything I bought — discounts that still left the prices a bit above what was accepted in other stores. Anyone who paid the label price would have been ripped off not only relative to other stores, but even in relation to what other customers were paying in the same store.

Besides the ethical concern there is also a practical one. When you are too flexible with your pricing you open yourself up to constant demands for discount which can wreck your markup.

So it is okay for you to offer an occasional discount to make a sale, but you should try to make sure that they remain truly occasional.


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JWR contributor Rabbi Dr. Asher Meir, formerly of the Council of Economic Advisers in the Reagan administration, is Research Director of the Business Ethics Center of Jerusalem, Jerusalem College of Technology. To comment or pose a question, please click here.


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