Proper Pricing #1

Rabbi Meir Orlian, based on the writings of Rav Chaim Kohn, שליט''א

Q: I called in the local plumber to fix a burst pipe, but didn't confirm the price before he began working. How much do I owe him for the job?

A: When a price hasn't been set, the general rule is that we follow the accepted going rate, k'minhag hamedina. (Choshen Mishpat 331:2) If there is a broadly accepted standard rate, this is easy. However, often there is a range of fees, with some workers charging more and some charging less. In this case, Ketzos Hachoshen (331:3) cites the Ritva that the workman, who is claiming payment, has the weaker hand, and can only demand the lower end of the price range. However, Pischei Choshen (IV:8(11)) suggests that if this particular workman has a known fee scale for his jobs, or if his quality of work is of a particularly high standard, we would follow that pay scale. To avoid misunderstandings and possibly cheating the worker, the Chofetz Chaim (end of Ahavas Chesed, Part I) strongly recommends getting a price quote before beginning any work.

Proper Pricing #2

Rabbi Meir Orlian, based on the writings of Rav Chaim Kohn, שליט''א

Q: Can I charge one price for immediate cash payment and a greater amount for credit or payment in installments?

A: This common question of two-tiered pricing relates to the issue of ribbis, interest. Payment for an item is due upon consummation of the sale, and therefore the price quoted for immediate cash payment is typically viewed as the "true price." Therefore, if the vendor charges more for credit or payment in installments, he is considered as charging interest for the delay in payment. According to most authorities, a heter iska would be required to allow such a pricing system. Otherwise, one is only allowed to pay the lower, immediate cash price. [There are some authorities, though, who maintain that if the credit price clearly reflects the true market price, and the cash price is a discount from the true price, it is allowed. (Chochmas Adam 139:5)] In any case, it is permissible to quote a single price, allowing for credit or payment in installments.