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Sam and Dan were publishing a Hebrew-English monthly calendar to distribute for free to families in their community. To cover the publishing costs, Sam sold advertising space in the calendar to local businesses.

“We need to charge $600 per ad to cover our expenses,” Dan calculated.

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Sam began making phone calls to various businesses in the neighborhood, asking for $600. Many of the small, local businesses considered the price high, and were willing to advertise only when Sam lowered the price to $400; the larger businesses accepted the price without question.

“At this rate, we are going to fall short of our goal,” said Dan.

“Maybe we should implement a two-tier pricing system,” Sam suggested to Dan. “Let’s charge smaller businesses $400 and larger businesses $800.”

“Wouldn’t that be cheating?” asked Dan.

“I don’t see why,” Sam replied, “but I’ll check with Rabbi Dayan.”

Once he heard the question, Rabbi Dayan replied: “There are two issues to consider, ona’ah (overcharging) and geneivas da’as (misleading). It all boils down to: Is $800 reasonable and did you post a standard advertising price?”

“What do you mean?” asked Sam.

“Charging a price significantly different from the norm is a violation of ona’ah,” explained Rabbi Dayan. “However, most items nowadays – including advertising space – don’t have a set market price. Rather, there is a price range. Charging anything within that range based on market conditions is not considered ona’ah. [Aruch HaShulchan, Choshen Mishpat 227:7; Hilchos Mishpat, Ona’ah, intro. ch. 3]

“Nonetheless, if you post a standard price, it would be misleading (geneivas da’as) to quote a higher price on the phone to someone who is unaware of your post. If you don’t post a standard price, you’re allowed to charge any price within reasonable range. You are not required to disclose that you charged others a lower price, unless you are specifically asked, in which case you may not lie. [Choshen Mishpat 228:6]

“I should add,” continued Rabbi Dayan, “that many items have a high ‘list price,’ which is charged in practice only to official customers. I should also note that advertising may be worth more to a large business.”

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Rabbi Meir Orlian is a faculty member of the Business Halacha Institute, headed by HaRav Chaim Kohn, a noted dayan. To receive BHI’s free newsletter, Business Weekly, send an e-mail to subscribe@businesshalacha.com. For questions regarding business halacha issues, or to bring a BHI lecturer to your business or shul, call the confidential hotline at 877-845-8455 or e-mail ask@businesshalacha.com.