Discounts and Sales - Rabbi Yisrael Meatuf shlita

00:02 Speaker 1 You’re listening to “Lemaan Yishme’u,” a podcast of Machon Halacha Chabad.

00:09 Speaker 2 Okay, today’s class is for the elevation of the soul of Zahava Leah daughter of Reb Nissim. We’ve been learning all along about price gouging, raising prices, prices that are too high. Today we’ll learn about lowering prices. Can you really lower prices as much as you want? At first glance, why not? Make it cheaper and cheaper—that’s great. So let’s see. First, there’s a dispute among the Tannaim. The Mishnah says, in source one: “Rabbi Yehudah says: A shopkeeper may not hand out roasted grains and nuts to children, because he gets them accustomed to coming to him.” Rabbi Yehudah says you’re not allowed to give children all kinds of things, because you get them accustomed to coming. The Sages permit it; they say it’s not a problem. The Gemara asks why the Sages say it’s not a problem. They say: “I hand out nuts; you can hand out almonds.” That’s the first ruling. The second: “And he may not lower the price.” Rabbi Yehudah—Rabbi Yehudah was very strict about buying and selling. We learned, for example, about sorting groats, cleaning the groats. I don’t remember whether that was Rabbi Yehudah or not, but there too, there was a dispute among the Tannaim: one forbade it and the Sages permitted it. So here too, Rabbi Yehudah forbids giving gifts to children who buy things, and he forbids lowering prices. “And he may not lower the price. But the Sages say: He is remembered for good.” The Sages say, on the contrary, lowering prices is a good thing.

02:03 Speaker 5 But in both cases, too.

02:05 Speaker 2 Right. That—that isn’t written in the Gemara. Regarding the nuts, regarding handing out roasted grains and nuts, the Gemara says: “I hand out nuts; you can hand out almonds.” Now, what about lowering prices? The Gemara asks: What is the Sages’ reason? It answers: Because he makes the market more plentiful. Let’s see what Rashi says in source two, on the Mishnah. On “And he may not lower the price,” Rashi explains: “To sell cheaply, because he gets people accustomed to coming to him and deprives his fellow of his livelihood.” If you sell cheaply, people get used to coming to you, and you cost the other person his livelihood. That’s why Rabbi Yehudah says not to sell cheaply. On “The Sages say: He is remembered for good,” Rashi says: “He is remembered for good, because this causes those who stockpile produce to sell cheaply.” Just as there are all kinds of business practices today, there were many back then too. One was to stockpile produce: gather it in warehouses so the price rises, and then, after everyone else has finished selling their produce, bring yours out and sell it at a high price. So, to ensure there’s plenty of produce and prices come down, he says that if you lower prices, they’ll see prices falling and stockpiling won’t help them.

03:28 Speaker 5 In the answers, we don’t need any more words, right? In Tel Aviv it’s going to be expensive despite the war; we need to show a solution, let’s say.

03:33 Speaker 2 Right, right. Lowering prices helps people. So here, people will bring out their produce, and that will lower the market price. That’s why he is remembered for good. What’s the reason? In the Gemara too, Rashi says roughly the same thing. Why is he “remembered for good,” an expression of praise? Because he makes the market more plentiful, and those who stockpile produce will see that prices have fallen and sell cheaply. In other words, there’s a dispute here about whether you can lower prices, and the reason given for allowing it is that it brings down the market price. Now, there’s a major dispute among the halachic authorities about what happens if you lower your prices but that doesn’t bring down the market price. For example, the Panim Me’iros discusses someone selling an item whose price is set by the government—a regulated price. The government sets the price, and he lowers it. Now, the Panim Me’iros says that won’t make the market cheaper. The market price is set by the government; it oversees prices and sets them. Your privately lowering your price won’t bring down the market price. So he wants to say that it would be forbidden.

04:45 Speaker 6 Because it harms the other person.

04:45 Speaker 2 Because it harms the other person: everyone will come to you instead of going to him. As Rabbi Yehudah said, it’s forbidden to lower prices. Why do the Sages permit it? Only because it brings prices down. If it doesn’t, then no. That’s what the Panim Me’iros says. It also follows from his words that, seemingly, the whole permission to lower prices applies only to food. After all, the whole issue of price gouging that we discussed concerns only food, the necessities of life. That’s where it says you may not stockpile produce, and all those other rules. The example Rashi gives here is people stockpiling produce—food, the necessities of life. It could be that according to this view, only with produce can you lower your price when that makes the market price cheaper. But with other things, don’t lower prices. Why does the market price need to be cheap? They also explain there: What’s the problem with price gouging? The Rashbam says it harms the poor. Poor people are struggling; they don’t have much money. They need to live, to eat. If you raise prices, they can’t buy food.

05:48 Speaker 6 For instance, during a drought, right?

05:51 Speaker 2 When?

05:52 Speaker 6 During a drought.

05:53 Speaker 2 During a drought, too, it’s certainly forbidden to stockpile produce. But it says that if there’s abundance, really great abundance—for example, today people do store produce, stockpile it—then it’s permitted, because it doesn’t cause prices to rise. So, seemingly, according to his line of reasoning, it would be forbidden to lower prices just like that. That’s what follows from the Panim Me’iros. Now he himself—soon we’ll get to the Tzemach Tzedek, who discusses this—he himself raises a difficulty with his view. Let’s look at source three. The Rema brings a case of two people living in the same place, one of whom wants to charge non-Jews a lower interest rate on loans. The other cannot object. “Living in the same place” means in the same city. We said we’d discuss the whole subject of competition in a separate class—opening shops next to each other and so on. Residents of the same city are in a different category: they’re allowed to open shops. Not without restrictions, but they’re allowed. Someone from outside isn’t allowed to come into my city, open a shop, and cause people to stop coming to me. So here the Rema says there are two people living in the same city, and one wants to charge non-Jews a lower interest rate on loans. They used to lend to non-Jews at interest. It says that this was their main business—lending at interest, and brokerage and so on, as there is today. So one wants to charge less. Ordinarily, the practice is to charge a non-Jew five percent interest, and he wants to charge four percent. What does the Rema say? The other cannot object. Seemingly, what’s the point here? How will this help bring down prices? And even if it does, why should that matter to us? We don’t need to lower prices for non-Jews. So why should it be permitted? That’s the question the Panim Me’iros asks about his own position, and then he answers that interest is different.

07:43 Speaker 2 Interest doesn’t have a fixed price, a set rate. Interest is something one person charges one way and another charges another way. So you’re allowed to charge less because there’s no set rate. But with something that has more or less the same price everywhere, you’re not allowed to lower the price. That’s the position of the Panim Me’iros. Now let’s see what the Tzemach Tzedek says about it. The Tzemach Tzedek brings a case of people who collected ash to make potash. Potash. I don’t know what that is. I looked up the word on Google and in Otzar Hachochma. I found it only in the Tzemach Tzedek and in works that quote the Tzemach Tzedek—there are many books like that, and they all quote him word for word. Nobody explains what this potash is. I don’t know what it is. Maybe someone can try to figure it out. They collect ash to make this potash. How? I don’t know. Ash.

08:48 Speaker 7 Ash. They used to make it, prepare it for—They did that in Yemen too. For [unclear].

08:58 Speaker 2 Ah, maybe.

08:58 Speaker 7 [unclear]. In Yemen...

09:00 Speaker 2 But here it seems—yes, right, right. Yes. But here it seems they make something from this ash. Now, they had prepared large quantities of ash. Those two people had prepared large quantities of ash, and someone else came along. He knew they had prepared those quantities, and he wanted to get into the same business. What did he do? He went to the local official and got him to issue an order that no one was allowed to buy this potash except from him.

09:41 Speaker 7 Exclusively.

09:41 Speaker 2 Exclusivity. He got exclusive rights from the local minister. Yes. Now what? Those poor people had prepared quantities of ash. Now, he wasn’t completely wicked. He told them, “I’ll cover your expenses,” something like that. He did try to meet them halfway, but they still said, “We wanted to make a profit. We didn’t organize all this for nothing, and you knew we were doing it.” But the Tzemach Tzedek discusses at length whether he was even allowed to open a business after he knew—this happens a lot today too. Someone works on a book, for example, for a long time, and someone else comes along and publishes a book on the same subject, knowing that the first person is working on it. That isn’t right. But the question is whether it’s prohibited. The Tzemach Tzedek explains at length that simply opening the business is not prohibited. But the question is whether going to the minister and—the minister—

10:33 Speaker 7 The minister.

10:34 Speaker 2 Going to the minister in charge and having him prohibit them from selling—was that right? Was he allowed to do that? Let’s see. Here in source four, he says: “However”—after writing that their having prepared the ash did not prevent him from opening a similar business, he writes: “However, as for the lessee’s arrangement with the minister that no one else should buy ash from any non-Jew, only he alone, it appears that he committed a prohibition.” That is forbidden. Why? “And even if you wish to say that the minister has the power to decree this upon his subjects, since they are considered his property—whatever a servant acquires, his master acquires.” Let’s say the minister has that power because all his subjects are considered his servants. He can decree, “Don’t buy here; buy there.” “Nevertheless, at the end of the chapter Hazahav, we learned in the Mishnah: Rabbi Yehudah says, ‘A shopkeeper may not give roasted grains and nuts to children, because he accustoms them to come to him.’ Rashi explains: ‘He deprives his fellow of his livelihood.’” According to Rabbi Yehudah, it’s forbidden to hand out gifts. Why? So as not to deprive the other person of his livelihood. “And the Sages disagree with him only because he can say, ‘I give out nuts; you give out almonds.’” That’s why it’s permitted. But if the other person has no way to do something similar—if you do something he cannot do—then it’s forbidden. Now, anyone can hand out gifts. One gives out this kind of gift, and another gives out a different kind. But what about here? “That is not the case in our situation, where the other party has no such option. The Sages, too, would agree that he is depriving his fellow of his livelihood.” The other merchants can’t go—once he got the minister’s authorization, “Only I may sell; no one else may sell,” they couldn’t do the same thing. The minister had already issued the prohibition. They couldn’t

12:37 Speaker 2 come to the market and do the same. It’s something only he can do. So even according to the Sages, it would be forbidden. What emerges from this? A principle about competition. Competition is permitted. We’re not—this isn’t communism. But competition has to be fair. You can do something if the other person can compete with you in the same way. What follows from that? As many halachic authorities say, suppose you lower prices. Someone opens a business and decides that for the first year, “I want people to get used to shopping with me.” Now, he’s from the same town, so he’s allowed to open. There’s already one grocery store, then a second, and now someone comes and opens a third. He’s a local resident, so he’s allowed to. But for the entire first year, he sets his prices at half price. He’s decided to take a loss, and he figures it’s worth it to get people used to shopping there. What happens when you sell at half price? Everyone comes to you. You keep doing it for a long time, selling at half price for an extended period. Everyone comes to you. What happens to the other stores? They close. Now you can’t say, “I give out nuts; you give out almonds.” You’re doing something the other person can’t do. Let’s go a little further. He says, “And as for what is written in the Shulchan Aruch”—he means the Rema we saw—“section 156, two people, etc.” Well, let’s not read the whole thing. I wanted to get to “And we must say.” Look at the line below “relevant,” concerning what we said about the Panim Meiros. This is very, very important. The Panim Meiros said: When are you allowed to lower prices? Only if you cause prices to fall for fruit, vegetables, foodstuffs, and so on. Otherwise, you may not lower prices. The Tzemach

14:36 Speaker 2 Tzedek says explicitly that the halachah does not follow the Panim Meiros. He writes: “And we must say that, in his view, what the Gemara says about ‘not lowering the price’—what is the Sages’ reasoning?—refers only to why they said, ‘He is remembered for good.’” Notice, it also says—look at Rashi again, Rashi number two. What does Rashi say there? He says, “‘What is the reason?’ ‘Remembered for good’ is an expression of blessing.” In other words, all the explanations we gave about prices coming down do not explain why lowering prices is permitted. They explain why he is blessed. Why does the Mishnah say he is “remembered for good”? Because he causes prices of food and so on to fall. But even if he doesn’t cause prices to fall, the Tzemach Tzedek still says what we said earlier: You can give out nuts; the other person can give out almonds. So if someone says, “I’m selling milk cheaply now,” fine—you can sell bread cheaply, or you can discount something else. Run a promotion on another product. As long as his discount is reasonable, something the other person can also manage, he can discount one thing and you can discount another. That’s permitted. So you can sell cheaply as long as you don’t undercut the market to the point that everyone has to come to you. That’s permitted.

15:57 Speaker 8 Is that also not possible?

15:59 Speaker 2 Right. Now, according to this, according to this—

16:01 Speaker 8 Why?

16:02 Speaker 2 It depends. As for being “remembered for good,” that blessing they spoke about would apply to food and things like that. With clothing and similar things, I’m not sure that “remembered for good” would apply. But is it permitted or forbidden? It’s permitted. That’s what the Tzemach Tzedek says. You can also see this in the Alter Rebbe’s wording. Let’s look for a moment at section six. In the second passage, the Alter Rebbe says: “And anyone may distribute roasted grains and nuts to children and to maidservants sent to the store to buy things, so that they will come to buy from him, because he can say to the other merchant, ‘I give out nuts; you give out almonds.’ Likewise, he may lower the price or increase the measure”—or reduce prices or increase quantities. Say I sell larger packages. Yes, you see there’s someone else.

16:54 Speaker 9 What does that mean? Huh? “Remembered for good,” or...

17:00 Speaker 2 Right. Of course, being “remembered for good” relates to causing prices to fall. Now, what does the Alter Rebbe say here? Why is he allowed to lower the price? He doesn’t say it’s because he causes prices to fall. He says it’s because the other merchant can do the same.

17:11 Speaker 9 Somehow that’s too small.

17:14 Speaker 2 Everyone can do a little: you lower the price here, and you lower it there. You see that this isn’t specifically about bringing down prices across the whole market. It’s a general permission, a general permission. Anything the other person can do, you may do as well.

17:28 Speaker 9 I did what I saw. Fine. But if we’ve undercut the market in one way or another, does that mean that, as a general halachic rule, there’s an issue with all the...

17:39 Speaker 2 Yes, right, that’s undercutting—right. I used the phrase “undercutting the market,” but that can be all right if it’s fair, if it really is fair. If you genuinely see a gap, somewhere costs can be cut. But sometimes people... Another example, by the way, could be someone who comes along and funds it. A wealthy man comes to the neighborhood, approaches one of the grocery-store owners, and tells him, “For six months, I’ll—I’ll make everything half price. I have an extra million shekels.” What?

18:05 Speaker 9 He gives it at that price.

18:07 Speaker 2 I don’t know. Now, what about giving things away for free? Here we have to pay attention to the circumstances. For example, there are charity sales. There’s an av beis din [unclear] who runs one here, there’s Ezras Achim, and there are all kinds of charity sales held from time to time. Or there’s—right, there’s a permanent sale. Sorry. First, as he says, if it’s for certain people, and you’re not causing the store to close, then those particular people will buy cheaply and everyone else will buy at the store. If these are occasional sales for Yom Tov, at certain times, that’s also fine. Even weekly sales. There’s the Mishnas Yosef sale; there are all kinds of once-a-week sales. Now, that weekly sale doesn’t mean people will stop going to the store. Some will go specifically on that day of the week. Right, it’s not as though the whole neighborhood goes there. But if you now open a permanent store with very low prices, even if, ostensibly, you’re doing it as a charitable undertaking funded by people’s donations, in practice you may cause someone else to close his store. So once you cut off his livelihood, when you deprive him of his income, that’s forbidden.

19:15 Speaker 9 Raising prices.

19:17 Speaker 2 Right. Once someone is charging excessive prices, you can certainly take action that will make him lower them. As we said, you can even organize a boycott and so on. There are various methods you can use, provided that the person really is just raising prices without justification. Now, several books quote something in the name of the Alter Rebbe. They write that the Alter Rebbe holds that, as an act of piety, one should not lower prices. Let’s see where they got that from, and whether that really is... I don’t think it necessarily follows from the Alter Rebbe’s ruling. Immediately after discussing price reductions, the Alter Rebbe continues, “And it is an act of piety not to enter into another person’s trade,” and so on. He continues there and cites a verse, and so forth. It is an act of piety not to enter another person’s trade. Those books apparently understood him to mean that, as an act of piety, one should avoid everything we’ve been discussing until now—so one shouldn’t lower prices, and so on. That’s how it’s quoted in his name. But let’s take a look and go back a little further, to the beginning of section six. The Alter Rebbe begins by saying: “By law, residents of a town may enter one another’s trades, for example, by setting up a store next to another store.” By law, you may open a store next to another store, even if you sell the same products. Why? The other owner might say, “No, people might come to you instead of coming to me!” But that isn’t a problem if the new owner is a resident of the town. A resident of the town is permitted to do it. The Alter Rebbe continues that “the second shopkeeper may give out roasted grains,” and so on and so forth. At the end, he concludes that it is an act of piety not to enter another person’s trade. Seemingly, he doesn’t mean that one shouldn’t lower prices. He means: Don’t open a store identical to one that someone else already has. True, you can say, “Listen, some people will come to me and some will come to you.” But this person was used to being the only one here, and now you’re reducing his income. So as an act of

21:11 Speaker 2 piety, you shouldn’t do that. But if there are already two stores—whatever the circumstances, there are already two stores—and one of them now wants to lower prices, that seemingly isn’t what the Alter Rebbe was saying one shouldn’t do. And why not? When you open a store next to another store, the other owner’s sales automatically go down. Some customers go here and some go there. That’s just how it is; it’s a normal distribution. People split between the two stores. But when someone lowers a price, does that automatically take customers away from you? No. You can offer a discount too; you can run a special too, and you’ll remain in the same position. In other words, you have the ability to compete with him. Yes, one runs a special, the other runs a special. Right. Okay.

21:57 Speaker 10 Across the coun—across the...

22:03 Speaker 2 Chains.

22:04 Speaker 10 [unclear], you know—

22:05 Speaker 2 Outside the town?

22:05 Speaker 10 You opened a store next to his.

22:06 Speaker 2 Yes.

22:10 Speaker 10 They’re all over the country; that would apply to you.

22:13 Speaker 2 Yes. Today—today the world... But even today, with the internet and everything else, when it comes to food and things like that, we still end up buying near home. People don’t order their groceries online. So these rules about local businesses still apply. In fact, by the way, earlier in that same passage the Alter Rebbe says that if you open a store that will certainly cause the other store to close—for example, in a small community without many people, where opening another store would force the existing one to close—you may not do so. There simply isn’t room for two players in that market. That’s what the Alter Rebbe says, because you’re effectively cutting off the other person’s livelihood; you’re actually depriving him of his income. What is permitted, if you’re a resident of the town, is to open a store and compete, even if that reduces his income to some extent. Now, that covers the general question: Is it permitted to lower prices or not? What’s the conclusion? In principle, it’s permitted to lower prices in a normal way. If you lower them drastically, in a way the other seller cannot match, it’s forbidden. And if you lower prices and thereby bring down market prices for food and similar things, you are to be commended. Let’s look at the presentation for a moment. All right, we didn’t say at the beginning what we’d be learning today, so let’s do that briefly. We’ll learn about lowering prices; we’ve already covered market price levels. Two other things we’ll learn about are stores that offer regular discounts, and displaying a price for the purpose of bargaining—when someone raises the price in order to bargain. We’ll discuss that too. So let’s see: What’s the summary on lowering prices? With food products, when someone brings down everyone’s prices, he is to be commended. With other products, it’s permitted according to the Tzemach Tzedek [unclear] the Alter Rebbe. Permanent loss-leader prices are forbidden. If it’s something temporary,

24:10 Speaker 2 if someone suddenly has a week when he sells tomatoes for 0.90, that’s fine. The other seller isn’t going to collapse because of it. That’s permitted. But if it’s ongoing and could cause the other seller to close, it’s forbidden.

24:25 Speaker 10 To cause [unclear]?

24:26 Speaker 2 Yes. Now, how do you lower prices? How do you give a discount? Something very common in all kinds of stores is to raise the price and then offer a discount, bringing it back to the original price. The question is whether that’s permitted. So let’s briefly recall the subject of misleading someone, and then return to our case. There are two kinds of misleading someone. One is in a sale: you cause someone to buy something that he wouldn’t have bought if he’d known the truth. That’s one kind. Another kind is in giving a gift. You make someone think he received a gift from you, that you did him a favor, so he feels indebted to you for something that didn’t actually happen. We gave an example: Someone comes to a house of mourning with a covered pot. People commonly bring food to a house of mourning. He comes with a covered pot, knowing they won’t need his pot, and there’s nothing inside it. The mourner thinks, “Look, he showed me respect and brought a pot,” but there’s nothing in it. That’s misleading someone. It didn’t cause the mourner to buy anything; it didn’t cause anything like that. But it made him think you’d done him a favor. That is misleading someone. Another example: a guest arrives and you open a barrel for him. He thinks you’re opening it for his sake, when in fact you weren’t doing it for him. And you—what?

25:57 Speaker 10 He wanted to open it anyway.

25:58 Speaker 2 He wanted to open it anyway. You give the guest the impression that you did it for him. There are cases—we had a whole class on this—where he misleads himself, and there are cases the sages said are forbidden. In any event, these are the two categories: either you cause someone to buy something he wouldn’t have bought had he known the truth, even though you aren’t taking money from him dishonestly or charging him more; or you cause him to feel indebted to you when he shouldn’t. Now let’s move to our case. We’ll give two examples. The first is what we mentioned earlier: raising the price. What I have here is a similar example too.

26:34 Speaker 10 Raising it in order to...

26:35 Speaker 2 Raising it in order to lower it.

26:36 Speaker 10 Bargaining.

26:37 Speaker 2 Right, we’ll talk about bargaining separately; there are some interesting sources on that. But here they raise the price so they can lower it. There’s also an example here where the business owner crosses out a price. If you look closely, you see it’s the same price—both prices are the same. Or sometimes the price after the discount is higher than the original price. That happens too. They offer you three for twelve, when each one costs three ninety. These things are a kind of deception. A person thinks, “Wow, here’s an opportunity; I’m buying at a discount.” He didn’t get any discount at all. So in principle, that’s a problem. Now, what about a store that gives a standing discount? There are lots of stores like that, furniture or appliance stores. You walk around and see high prices, and you say to them, “Wow, what’s with these prices?” They tell you, “Don’t worry, don’t worry, we’ll work out the price in the end.” And they always, always, always give the customer an automatic twenty-percent discount when he gets to the register. That store gives a twenty-percent discount all year round. There’s a store here that... no, a chain of stores that used to give a seventy-percent discount every time.

27:54 Speaker 10 Until...

27:54 Speaker 2 Afterward? No, it really was a seventy-percent discount, but their prices after the seventy-percent discount were like another store’s prices without a discount. Their prices were very, very high.

28:03 Speaker 10 A lot of prices.

28:04 Speaker 2 Yes. So is it deceptive for them to display high prices and then give you a discount when you buy? What do you think? Let’s assess it according to the two things we discussed. One is deception in a sale: a person bought something he wouldn’t have bought if he had known the facts. The second is causing someone to feel grateful to you for no reason. Let’s see. We’ll look at the first case and then move to the second. In the first case, you crossed out a price: it was fifty-five, you raised it to sixty, crossed that out and sold it for fifty-five. The person bought it. Why? Maybe he bought it because he thought he was getting an opportunity, a discount. In other words, you gave him false information. That would seemingly be deception in a sale. Now consider that other store, where they don’t advertise discounts. You don’t see any discounts in the store. All the prices are high, and when you go to pay at the register, you get a discount. Notice that seemingly there’s no deception in the sale, because the buyers saw the high price and still agreed to go to the register and buy. That shows they didn’t come because of the discount. Now, the discount at the register makes a difference. If he makes you feel, “Let’s give you a good price. Listen, you’re a good person; I’ll give you a special price,” making you feel you’ve received a special discount that only you got, then he’s making you feel grateful to him for no reason. You think he’s done you some sort of favor, when he hasn’t done you any favor at all. But if it’s clearly a standard discount—okay, the cashier automatically takes twenty percent off, without making you feel that it’s

29:51 Speaker 2 something special for you—then it would be permitted. That’s how it comes out. So let’s sum it up with the presentation. If you raise the price for the purpose of offering a discount, it’s forbidden, because the person thinks he got a discount when he didn’t get any discount at all. If you give everyone a general discount at the time of purchase—not at the beginning, but at the end—then seemingly there’s no problem with it; it’s permitted. But if you make it seem like a personal discount when you haven’t actually given him anything personal, that’s what we also read last week in Yosef Ometz. He writes something like, “Nevertheless, I’ll buy it from you or sell it to you at this price out of love for you.” I’m doing it because of my love for you, when that isn’t really true. Then it’s a problem of the second kind of deception.

30:44 Speaker 11 Flattery.

30:45 Speaker 2 What?

30:46 Speaker 11 I said, flattery.

30:47 Speaker 2 Absolutely, flattery. There’s also, uh, misleading someone, lying, [unclear], and other things here, but in terms of deception, there is a problem of deception. Now let’s move on to bargaining. Someone comes into a store to buy something. The seller knows him and knows that this buyer is never willing to pay the price he’s first quoted. Right? He always bargains. So the seller raises the price beforehand, and then comes down until they reach the real price. The question is whether that’s deception, whether it’s a problem, whether it’s forbidden—whether there’s lying or deception here. Now, this is a question that was put to Rabbi Zilberstein. He brings a source from the Gemara. Later we’ll see that seemingly there’s a more explicit source in the Mishnah. Let’s go through it slowly. He brings an interesting source from the Gemara. Look at number seven. It’s a story; we’ll tell it briefly, without going into it at length. “Rav’s wife used to cause him distress.” He had a difficult wife. There’s a passage in the Gemara there about difficult wives. She would upset him: “When he told her, ‘Make me lentils,’ she would make him a different kind of legume.” She did it deliberately. “When he asked for the other kind of legume, she would make him lentils.” When his son Chiya grew up, he would reverse the request for her in advance, and she would make exactly what was wanted. Rav said to him, “Your mother has changed!” Ah, I see, suddenly his mother had become a good wife. Suddenly she was doing what she was asked. His son said to him, “I’m the one reversing it for her.” Don’t worry, I’m switching the request, and that’s why she does it. Rav replied, “That’s what people mean when they say that wisdom comes from your offspring.”

32:38 Speaker 2 “You’ll learn wisdom from your children” [unclear]. The one who comes from you teaches you wisdom. In other words, your son teaches you wisdom. And Rashi explains that Rav is telling him, “I should have done that myself.” That’s what he says: “I should have done that.” Then he goes on: “But you mustn’t do that,” as it says, “They have taught their tongues to speak falsehood.” What does he mean? He says, I should have done it, but you mustn’t.

33:07 Speaker 12 If each person does it himself, then there’s no...

33:09 Speaker 2 What? What’s the difference between them? Does he explain?

33:12 Speaker 12 He’s the son, and he already knows what’s wanted. It’s the son, the son—uh, that’s where the problem is.

33:20 Speaker 2 Notice that here—

33:21 Speaker 12 The son is lying, and...

33:24 Speaker 2 The son is lying, but the father isn’t. What does that mean? Rashi doesn’t explain it quite this way. He also doesn’t cite the verse “You shall not lie”; he cites “They have taught their tongues to speak falsehood.” Here’s the point: the father simply said, “Make me lentils.” All right? Did he lie about anything? He didn’t lie. He said, “Make me lentils,” and she made him the other thing. There’s no problem with that. But the son goes and tells his mother, “Father said to make him the other kind of legume.” That’s already a lie. His father didn’t say that; he said something else. And even if the son says, “Father wants such-and-such,” that’s also untrue. His father doesn’t want that; he wants the other thing. So it’s forbidden for the son to lie, but it’s permitted for the father. Rabbi Zilberstein says this—

34:05 Speaker 12 If the father wants, the father can—

34:09 Speaker 2 Both would be lies. For example, the father wants lentils. Now, if the son says, “Father said to make me the other kind of legume,” that’s a lie. And if he says, “Father wants the other kind of legume,” that’s also a lie, because he wants the lentils. That’s why it’s forbidden for the son.

34:22 Speaker 12 But that’s when the son said it to her. What should he do?

34:25 Speaker 2 What?

34:27 Speaker 12 Tell her.

34:27 Speaker 2 No, then the father—the father would tell her directly.

34:30 Speaker 12 Huh?

34:30 Speaker 2 The father would tell her directly, “Make me such-and-such.”

34:32 Speaker 12 [unclear] But the father can do it himself.

34:38 Speaker 2 You think?

34:38 Speaker 12 The father can do it himself.

34:40 Speaker 2 That’s what he says. He says, “I learned from my son.” He says, “I learned from my son the idea that I can do it directly myself; I’ll reverse the request.” But the son may not. Right? Now, what follows from this? Rabbi Zilberstein draws the following conclusion. He says: A person comes to bargain with you, and you know he’s going to bargain over the price. You don’t tell him your final price. You say, “I want a hundred and fifty shekels,” when the item costs a hundred. “Give me a hundred and fifty.” All right, give me a hundred and fifty. In the end, you’ll get to the point where he gives you the hundred you wanted. So it’s just like the father saying, “Make me lentils,” when he really wants the other thing. Here, too, you say, “Give me a hundred and fifty,” when you want the hundred. So he says there’s no problem with that. Right. But seemingly there’s a very explicit source for this in the Mishnah, and we’ll also discover it in the explanations of the early commentators. Look at number nine.

35:40 Speaker 12 Even if he gives it to him for 150 on its own.

35:44 Speaker 2 Then there’s already a problem of overcharging.

35:45 Speaker 12 Why?

35:46 Speaker 2 There’s a prohibition against selling someone something above the market price without telling him that you’re now selling it for more than the market price.

35:52 Speaker 12 If he offers you a deal, saying, “I’ll give it to you for 50 as a special offer.”

35:56 Speaker 2 That’s it—a special offer. When you tell him it’s a special offer and you feel like—

36:00 Speaker 12 No, he says 150.

36:00 Speaker 2 Oh, he told him 150, and then the other person suddenly doesn’t bargain with him.

36:03 Speaker 12 So he wants to lower it to 150 for him.

36:06 Speaker 2 No, you have to think about how to do it, so he doesn’t get the impression that you want to do him a special favor. You can tell him, “Oh, actually, I just remembered. Yes, I was mistaken. Give me 100.”

36:17 Speaker 12 If earlier he said...

36:19 Speaker 2 No, if earlier he said 50, there’s no problem. No problem.

36:21 Speaker 12 I’ll do it; 100 is enough for me.

36:24 Speaker 2 Yes, fine. That’s lowering the price. We said earlier that someone who lowers prices deserves praise, if it brings the price down.

36:28 Speaker 12 Yes, I’m cutting it.

36:31 Speaker 2 Now let’s look at a Mishnah, on page nine: “The Sages permitted four kinds of vows.” It lists several kinds of vows that the Sages permitted. One of them is vows made to spur someone on. How so? “A person was selling an item and said, ‘Konam, I will not lower the price for you below a sela.’” The seller is saying, “I won’t sell it to you for less than a sela.”

36:53 Speaker 12 What?

36:53 Speaker 2 How much? A sela is four dinars, four zuzim. “And the other says, ‘Konam, I will not add anything above a shekel.’” A shekel is two dinars. The buyer swears, “I won’t offer you any more.” Now they’re both standing there; they’ve both sworn. One says, “I won’t come down from four,” and the other says, “I won’t go up from two.” What do they do now? Ah, they both want to settle on three dinars. Fine, the purchase can go ahead. Why? Pay attention: there’s an explanation there by Rashi and Tosafos. But the Ran’s explanation is the clearest. The Ran explains there: “It is clear from the nature of the matter, because this is how sellers and buyers normally act, and therefore it is not considered an unspoken intention.” There’s a rule regarding vows, financial matters, and various other things: you can’t say, “That’s what I was thinking in my heart.” Unspoken intentions don’t count. You have to say it explicitly. But if you say something everyone understands, even if you haven’t said it explicitly, it’s as though you said it explicitly. The Ran says that when one person swears, “I won’t come down from four,” and the other swears, “I won’t go up from two,” that’s the normal way for a seller and buyer to act. They themselves understood from the outset that they didn’t really mean to make a genuine vow. They did it to spur each other on—vows made to spur someone on. So there’s no problem with it. It’s not even considered an unspoken intention; it’s considered something explicit. What follows from this? That it’s something that—

38:12 Speaker 12 Why isn’t it a vow?

38:13 Speaker 2 What?

38:13 Speaker 12 Why call it a vow?

38:16 Speaker 2 He says “konam.” Konam is—it's a form of vow. He says it as a vow.

38:21 Speaker 12 He’s declaring that he won’t lower the price.

38:23 Speaker 2 He’s declaring that he won’t lower the price. You’re asking why—

38:27 Speaker 12 It’s commerce. It’s—

38:27 Speaker 2 Yes, but they did it. They did it explicitly—

38:29 Speaker 12 He declares it. He declares it.

38:31 Speaker 2 They did it explicitly in the form of a vow.

38:33 Speaker 12 Ah.

38:33 Speaker 2 Yes, that’s what we’re talking about.

38:35 Speaker 12 The seller accepts.

38:36 Speaker 2 Yes, one makes a vow this way and the other makes a vow that way. Even so, he says, “This is how buyers and sellers normally act.” It’s part of the normal process. You see that bargaining is part of the normal process. But before we sum up, to conclude—

38:48 Speaker 12 No, it isn’t considered a vow. It isn’t a vow because he didn’t intend it as a vow.

38:52 Speaker 2 Yes, but after all, “this is how buyers and sellers normally act.” To such an extent that—

38:55 Speaker 12 It isn’t a vow.

38:56 Speaker 2 Yes. No, to such an extent that it isn’t considered an unspoken intention. It’s as though everyone understands that he doesn’t mean it. In other words—

39:04 Speaker 12 It isn’t considered a vow.

39:07 Speaker 2 It isn’t considered a vow. What is misleading someone? It’s when a person thinks you gave him a discount. Right? Now—

39:11 Speaker 12 Not here. Here, everything is out in the open.

39:13 Speaker 2 If it’s... What?

39:15 Speaker 12 If it’s the normal way to do business.

39:15 Speaker 2 If it’s the normal way to do business. What? Negotiation.

39:18 Speaker 12 That’s exactly what their conversation shows.

39:20 Speaker 2 Yes, but if that weren’t the normal way, then it would also be forbidden on account of the vows. It has to be something evident, not an unspoken intention. The Ran—

39:28 Speaker 12 It isn’t a vow.

39:28 Speaker 2 Correct. And how does the Ran explain why? “Because this is how sellers and buyers normally act.” It’s normal to say things like that without really meaning them. That’s the normal practice. In other words—

39:38 Speaker 12 It isn’t misleading anyone.

39:39 Speaker 2 So yes, the seller—the buyer knows. We’re talking here about a situation where people know there’s bargaining, right? They know there’s bargaining. For example, negotiations between companies, between businesses, and so on. There are negotiations. You know from the outset that one side presents things one way, the other side presents them another way, and afterward they want to reach a compromise. So that isn’t considered misleading anyone. Nevertheless, pay attention to what the Shelah says. Shnei Luchos Habris, section eight—we’ll finish with this. He says: “One who is a man of truth in all his dealings, whether buying and selling or lending, should always state his final position the first time, and accustom those who deal with him to know that he will not change his words, raise his price, or lower it.” He seems to recommend not doing all these sorts of things. You come in and say something, and that’s final. No negotiation. I don’t know whether he literally means this for every negotiation and everything else, but it’s about getting the people around you used to the fact that you don’t keep changing your mind. You say something, and you stand by your word. He says there—and it’s interesting that the Shelah says this—that if someone always acts this way and even carries out what he intended in his heart, he receives a blessing that what he says will actually work out for him; the things he says will work out. To summarize—let’s sum up. We spoke about lowering prices. I’ll do this with the presentation.

41:08 Speaker 3 We’re talking about lowering prices?

41:10 Speaker 2 Lowering prices in general. If it brings down market prices for food staples, he deserves praise. It says that a person who does that is remembered for good. If they’re other products and he isn’t bringing prices down generally, but is simply lowering his own prices and drawing customers to him, that’s permitted. But if he sets extremely low, loss-making prices so that no one can compete with him, then he’s harming other people’s livelihoods. That’s what the Magen Avraham notes, and the Alter Rebbe says it would be forbidden.

41:43 Speaker 3 But he’s losing money.

41:44 Speaker 2 What?

41:44 Speaker 3 He’s losing money.

41:45 Speaker 2 He’s losing money too, but he—

41:48 Speaker 3 He’s investing in it.

41:48 Speaker 2 Yes. No, for example—we gave an example—there are two grocery stores here. He wants, in the long run, to be the only one here. So he comes and opens a third store. What does he do? He keeps prices low for a year and loses money. They close their stores, and then he has the market to himself.

42:05 Speaker 3 So then he makes money.

42:06 Speaker 2 For example. Then he raises prices and does whatever he wants. So that would be forbidden if you cause someone else to close his store. Now, regarding discounts: there’s raising the price in order to offer a discount, which is forbidden. You raise the price for the sake of the discount, because that’s misleading people.

42:24 Speaker 3 And for every...

42:25 Speaker 2 But—

42:26 Speaker 3 All right, like that. But if you’re dealing with—there are two grocery stores that are already charging a lot anyway.

42:34 Speaker 2 Okay.

42:34 Speaker 3 If he’s just attracting customers.

42:36 Speaker 2 And you lower prices in a way that’s fair.

42:38 Speaker 3 Say he lowers them anyway—say Rami Levy offers...

42:42 Speaker 2 Right, that’s permitted. It’s permitted, it’s permitted. We’re talking about a case where—

42:45 Speaker 3 But causing them losses. Causing them—

42:48 Speaker 2 That’s not losses. Losses means they have no profit at all and will have to close the store because of it. But here you’re also causing them to earn less. They’ll earn less, but they’ll keep going.

42:59 Speaker 3 They can raise the price.

43:02 Speaker 2 Right, that’s—

43:02 Speaker 3 That doesn’t mean they’re making a profit.

43:04 Speaker 2 Right. A chain versus a store, for example—that could be a problem. If you open a big supermarket in a place where it will cause the grocery store to close, because the grocery store can’t withstand it but you can, then apparently that would also be a problem. And the Alter Rebbe says— That’s it. If there’s a grocery store that can stay open because people will buy there, then you aren’t shutting it down; you aren’t causing it to close, and that would be all right. The Alter Rebbe says it’s a measure of chassidic conduct not to enter another person’s trade: not to open a store when someone else already has a store in the same line of business. Don’t open one, even if you’re a resident of the town. That’s a measure of chassidic conduct, but according to the letter of the law, it’s permitted. Now, a general discount given at the time of purchase: we said that would be permitted, because that isn’t why people came to buy, and they— What? They didn’t—

43:54 Speaker 3 A seventy percent discount.

43:56 Speaker 2 No, if he announces it in advance and it isn’t a real discount.

43:58 Speaker 3 It really isn’t seventy percent.

44:00 Speaker 2 Correct.

44:00 Speaker 3 It’s just that he raises it, and then—

44:02 Speaker 2 Right, now, what you’re describing is the example. What happens if it’s so common that everyone understands it isn’t really a discount? Here the Alter Rebbe says that if everyone understands it, it’s permitted, but a person who guards his soul should stay away from it. That’s how we discussed soaking meat earlier. A person who guards his soul should stay away from things like that, because there will be a few people who fall for it. But if most people don’t catch on and think it really is a discount, that’s a problem and it’s forbidden. A personal discount is forbidden, because the customer feels indebted for a favor he didn’t actually receive. Raising the price for the sake of bargaining is permitted. Section 5.

44:44 Speaker 4 Gave a personal discount?

44:46 Speaker 2 You make him feel as though he alone got the discount, when you give it to everyone. He feels indebted to you for nothing, and that’s forbidden.