Tuesday, November 22, 2005

Pre-Publication Discounts

An interesting halakhic problem for a publisher is offering a pre-publication discount -- giving a lower price if someone pays in advance. In essence, you are charging less for the benefit of having extra time with the money, which is a form of prohibited interest. However, there are two details that can change this.

1. According to R. Moshe Feinstein (Iggeros Moshe, Yoreh De'ah 2:63), the prohibition against charging interest does not apply to corporations. Therefore, if the publisher is a corporation, there is nothing to talk about. However, many authorities disagree with this position.

2. If only the orders are taken in advance but not the money, then there is no money changing hands until the book is ready to ship, which is permissible.

3. R. Yisroel Reisman (The Laws of Ribbis, pp. 159-160) recommends extending the pre-publication discount until the book is already in stock at the publisher (even if not at bookstores). Once the book is in stock, there is no prohibition of offering a discount. And, therefore, there is no prohibition offering a discount well in advance that will last until a time when the book is in stock.

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