In this issue

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

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 March 17, 2008 / 10 Adar II 5768

Rebate or Kickback?

By Rabbi Dr. Asher Meir

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http://www.JewishWorldReview.com | Q: Our company makes bulk purchases on behalf of small stores who benefit from our concentrated purchases. Occasionally in addition to standard quantity discounts, we also get rebates. Who is entitled to these rebates — us or our customers?

A: There are two potential problems with your company keeping these rebates:

The first problem is your ability to do your job properly. Your customer is paying you to scout out and obtain the best merchandise for the lowest price. That's why you get a commission. When you obtain a rebate from the supplier, your judgment is liable to be colored; you will tend to favor suppliers who give rebates over others who may have better merchandise or prices.

The Torah tells us, "Don't take bribes, for a bribe blinds the eyes of the wise and distorts the words of the righteous" (Deuteronomy 16:19). The Torah is telling us that partiality towards one who gives a gift is practically speaking inevitable; even a wise and righteous person will find his judgment affected.

The second problem is that accepting the rebate could be considered "double dipping." You are getting paid by the customer to buy objects on his behalf; from that time on you are merely the agent of the final customer. Any rebates offered really belong to the customer, not you.

Your company undoubtedly already accepts this understanding regarding your own employees. After all, you asked if the rebate belongs to your company or the customer; it didn't occur to you that it should accrue to the individual purchasing agent who happened to carry out the purchase.

The Talmud discusses a similar case, in the following passage:

If they [the sellers] added one extra [item], it all belongs to the agent; so says Rabbi Yehuda. Rabbi Yosi says, they divide it. But did we not also teach: Rabbi Yosi says, it all belongs to the payer? Rami bar Chama said, there is no difficulty: This case is where there is a fixed [price], this one where there is no fixed [price]. (1)

If there is no fixed price for the purchase, then the "extra" item is not extra at all; it just means that the seller is selling for a lower-than-expected price and giving the customer more for the money. But if there is a fixed price for the item, then the extra could be seen as being something quite apart from the purchase; perhaps the seller decided to personally favor the agent. Even so, Rabbi Yosi concludes that the payer (customer) is still entitled to half, because the generosity of the seller was a result of his work on behalf of the customer.

How does this play out in your case? If the rebate is part of a publicized, equitable rebate program, it would be considered "no fixed price". This is not a special extra given to you, but rather a discount, perhaps temporary, in the price. If most customers don't get a rebate but you do, the possibility exists that this supplier esteems a special relationship he has with your firm, above and beyond relationships with other customers who make similar orders. In this case, your firm might be entitled to part of the rebate.

This is a complex case. A similar situation arose a few years ago regarding a gigantic hotel management firm; when the case reached court, Price Waterhouse Cooper Accountant Sean Hennessey told reporters that the status of the payment was not really clear: "One side calls it a kickback and the other calls it a rebate." (The judge looked askance at the buyer's actions and particularly their opaque accounting practices and ordered them to return tens of millions of dollars.)

The best response to these questionable, border-line cases is not to leave them to chance. When you negotiate your fee agreement with the customer, you should include an explicit clause stating how special, negotiated rebates (as opposed to equitably applied discounts) will be accounted for and split up. Whatever you decide to do in this particular case, it should be accounted for in a transparent way so you don't share the fate of the ill-fated hotel management firm.

SOURCES: (1) Babylonian Talmud, Kesubos 98b


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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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