going to vacation? one precaution

One must exercise caution when prepaying for Shabbaton reservations, hotel rooms, car rentals for vacation, and similar services, due to the concern of ribbit.

As Chanukah approaches, advertisements for trips, Shabbatonim, and various vacations increase. It should be noted that a potential issue of ribbit may arise when someone pays for such a vacation in advance.

The Shulchan Aruch (Yoreh De’ah 173:7) rules that it is forbidden to pay money in advance for goods at a discounted price when the goods will only be received later. When payment is made upfront, the money is considered a loan, and the discount received due to early payment is considered rabbinic ribbit.

Although there are situations in which advance payment is permitted—such as when the seller already has the product in his possession at the time of payment, or when the item has no fixed price—in our case the price is set in advance, and the “product” is not considered to be in the seller’s possession. R’ Akiva Eiger (Bava Metzia 72b) writes regarding a rented house that the landlord may not lease it to another person at a reduced rate for a later period, since the house is currently rented and not in his possession to offer at a discount.

Similarly, Sefer Toras HaRibbis (ch. 14, n. 11) notes that there is a concern of ribbit with hotels that advertise that customers who book and pay in advance receive a discount. At times, only a small deposit is requested in order to finalize the deal; some authorities permit this only if the deposit is around 5% and no more.

Therefore, before advertising such payment arrangements—or before actually making such advance payments—one should consult a Rav knowledgeable in the laws of ribbit to determine whether any leniency or heter applies in the specific case.