Early Bird Discounts for Camp?

Ask the Rov: Does an early bird discount for camp registration involve an issue of ribbis?

By Rabbi Chaim Hillel Raskin – Rov of Anash in Petach Tikvah

Offering two different prices for a received item or services already rendered—one for immediate payment and a higher price for later payment—is generally prohibited under ribbis derabanan. Chazal viewed the higher price as charging the buyer interest for holding onto the money for a longer period. (This doesn’t violate ribbis de’oraisa since it occurs within a business transaction rather than as an outright loan.)

A discount for advance payment on future services raises the same concern. While it’s true that payment for services is typically due only after completing the work, and the client is voluntarily paying early to receive a discount on an amount not yet owed, it will depend:

When the service provider only begins work at a later date, the arrangement appears more like a loan than a service transaction—the advance payment resembles lending money, with the later service serving as repayment, accompanied by “interest” (in the form of the discount).

When the service provider begins work immediately upon receiving advance payment, offering a discount is permissible. Since the work commences immediately, the payment is directly linked to active service provision and does not resemble a loan.¹

If a camp’s back office is already operational when advance payment is received, there’s halachic room to offer an early bird discount, as some services are being provided immediately. Furthermore, when a camp operates as a non-profit mosad rather than a personal business venture, it falls under the category of dvar mitzvah, for which ribbis derabanan restrictions may be relaxed (see issue 253).²

A straightforward halachic solution is to incentivize early registration by offering a discount to the first set number of registrants. The camp can then decide whether to extend this promotion or end it at your discretion.

Minor registration deposits to demonstrate serious commitment and prevent cancellations are not considered advance payments in the problematic sense, even if they lock in a discounted rate, and are therefore permitted.³

When there’s uncertainty about whether a ribbis issue applies to a particular arrangement, it’s advisable to include language in the contract stating that the transaction is conducted according to a heter iska (a business partnership structure that avoids ribbis concerns).

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From The Weekly Farbrengen by Merkaz Anash