Volume III: Number 18: Fair Profits and Measurements

Question:

Which basic Torah laws must a businessman be aware of regarding making profits and accurate measurements?

Answer:

1. A. According to the Torah, there is no limit on how much profit may be made by business owners on a product that they sell. If all sellers of a specific product decide to sell it at 100% profit, or more, there is nothing to prevent them from doing so. The laws of Ona’ah – overcharging, only apply when one seller is charging 16% more than the going market rate for a certain product in that locale.

2. Our Chaza”l have made a decree that a person may not charge more than 16% net profit for basic food staples that everyone needs, such as bread, oil, and dairy products. However, this decree is only applicable where all area merchants are under the jurisdiction of a Bais Din, and the Bais Din has powers of enforcement regarding these matters. Therefore, in most societies today, this decree is not relevant. However, the Torah prohibition of Ona’ah remains on these items, as it does on all other grocery items. (1)

3. If someone sells something to his friend that is generally sold by weight, volume, or measure, and a mistake was made in the measurement, the sale is still valid, but the outstanding amount must be reimbursed. For example, if someone thought he was purchasing 1 kilogram of a certain item, and it turns out to actually be 990 grams, or 1010 grams, neither side can back out of the sale. Rather, whichever side came out losing may demand reimbursement for their loss.

   If someone realizes that they received too much money or goods, and they do not know who they received it from, they should take the money or value of the goods and perform community service with it, as is stated in the Shulchan Oruch, Choshen Mishpat 366:2. [See our class on this topic, Business-Halacha: Community Service – Vol. II No. 10. To retrieve that class, send a message to [email protected] with no subject and the content: get business-halacha business-halacha.980520 .]

4. If the item is something upon which no compensation can be made for the mistake in measurement, and it is not customary for the buyer to make his own measurement before purchasing (e.g. a tailor who requested 3 meters of fabric from the seller, and received only 2.8 meters), the sale is void, and the seller must return to the tailor the full amount of money paid. Even if the tailor had already started cutting the fabric before he realized that it was shorter than he needed, and the seller can now do nothing with it, the tailor can return the fabric to the seller as is and demand that his money be refunded. However, it is preferable that some compromise be reached in this case, if possible. (2)

5. There is no statute of limitations regarding the obligation to refund for an error in measurement, just as there is none regarding theft. This is true even if the error was done unintentionally. It also makes no difference whether either party is a Jew or non-Jew. However, the victim of the error may obviously forgive the other party at any time. (3)

6. A store owner must be extremely careful that all scales and measures in his store be exactly correct. It is forbidden for him to keep a broken scale or measure in his possession. Rather, it must be immediately given to be fixed, or thrown out. This is true even if he has another scale and has no intention of using the broken scale at all. (4)

7. Many electronic scales that are found today in most stores are not exact, and round off the weight to the nearest measuring unit, e.g. 5 grams on a regular store scale, or even 50 grams on an industrial size scale. However, since the scales are tested regularly by government agencies to determine their accuracy, most consumers rely on the government license that the scales have. Therefore, we can assume that both seller and buyer are entering an agreement to use the measurement as stated by the scale, and both parties forgive any loss that they may incur because of any discrepancy. Consequently, according to Halacha, these scales may be used.

   However, it is proper for a G-d fearing store owner to place a notice on the scale informing the consumer that the scale rounds off the amount, and any sales are conditional on the buyer accepting this.

   Some store owners try to remedy this problem by setting the scale to -3 grams, thus insuring that the customer will never lose because of the rounding off. However, it is not proper to do so, since there are times when suppliers might come into the store and use the scale to weigh things that they are selling to the store owner, in which case the store owner will benefit from the inaccurate setting! Therefore, the setting should be left to be as accurate as possible, and the remedy of placing a note should be used, as stated above.

8. Scales that are used to measure very small and expensive items, such as gold and diamonds, must be perfectly exact, and no rounding off is allowed at all. Since each gram has great value, it can not be assumed that the consumer forgives any rounding off at all if it is to his detriment.

Sources:

(1) Shulchan Oruch, Choshen Mishpat 231:19-24.

(2) This is stated in the Shulchan Oruch, Choshen Mishpat 232:1,13-14, and in the SM”A there (1-4 and 29-32). The Nesivos also states this in the Biurim (5). It appears to me that in our case, where it is not common for the consumer to measure the item before taking it home, and he relies totally on the measurements of the seller, and the seller is aware of this, all agree (even the Maggid Mishna quoted in the SM”A in 232:2) that the sale is void if the measurement is found to be inaccurate. This is also stated in the Pischei Teshuva there (1) in the name of the Teshuvos Shvus Yaakov, and the Terumas HaKri.

(3) Shulchan Oruch ibid. 1.

(4) Shulchan Oruch ibid. 231:1-3.

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This week’s class is based on a column by Rabbi Tzvi Shpitz, who is an Av Bet Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. His column originally appears in Hebrew in Toda’ah, a weekly publication in Jerusalem. It has been translated and reprinted here with his permission and approval. His columns have recently been compiled and published in a three volume work called Mishpetei HaTorah, which should be available in your local Sefarim store.

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This week’s class is based on a column by Rabbi Tzvi Shpitz, who is an Av Bet Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. His column originally appears in Hebrew in Toda’ah, a weekly publication in Jerusalem. It has been translated and reprinted here with his permission and approval. His columns have recently been compiled and published in a three volume work called Mishpetei HaTorah, which should be available from your local Sefarim store.

Feedback is appreciated! It can be sent to[email protected].

This week’s class is based on a column by Rabbi Tzvi Shpitz, who is an Av Bais Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. His Column originally appears in Hebrew in Toda’ah, a weekly publication in Jerusalem. It has been translated and reprinted here with his permission and approval.

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Please Note: The purpose of this column is to make people aware of Choshen Mishpat situations that can arise at any time, and the Halachic concepts that may be used to resolve them. Each individual situation must be resolved by an objective, competent Bais Din (or Rabbinic Arbitrator) in the presence of all parties involved!