One of the challenges facing retailers during the frantic holiday season is dealing with returns of merchandise. A recent study indicated that up to 1/3 of all purchases are returned after the holiday season. Included in that amount are fraudulent returns as customers buy items with the intent of using them once before returning them. Besides the obvious issues of theft and deception such activity undermines the entire structure of business.
It is in this vein that the Talmud (Bava Batra 88b) teaches that dishonesty in weights and measures i.e. business fraud is “more difficult” than sexual immorality. While the latter is a capital offence its impact on society as a whole is much less that the inability to conduct business in an honest environment. The economic backwardness and poverty that is the lot of much of the world is in a large measure due to business practices. With bribery, fraud, corruption and kickbacks all too common the ultimate effect is an impoverished society. Thankfully in North America while the practice of business ethics is far from perfect, the general environment is one in which honesty generally prevails and those who try to cheat the system are pursued by the law. After I penned these word I noticed that the Globe and Mail recently quoted a study, reporting that “Endemic and institutional corruption impedes a country's stability and growth, making it difficult for countries to tap into much-needed foreign investment and aid opportunities. It also has a huge effect on the people living in these countries, diminishing their trust in their leaders, reduces their incentive to work hard, and making entrepreneurial efforts and civic engagement less likely”. While economists do not measure the ethical output of countries it is clear that economic growth is dependant on moral growth.
The Mishna (Bava Metzia 3:2) in expressing its revulsion at those who take advantage – even if technically legal - of the toil and effort of others, asks rhetorically “how can one conduct business using the cow (i.e. property) of another”! It is this principle that generally prohibits an employee from taking clients with them as they establish their own business.
Of course most returns of goods are not fraudulent and represent a shifting assessment of perceived needs. Nonetheless the Jewish legal system stated that all sales are final. The only exceptions being claims of Ona’ah, those of price fraud. Price discrepancies from the market norm of more than 1/6 allow the aggrieved party to void the sale. Even here there is a very short window of opportunity to make this claim, corresponding to the minimum amount of time needed to verify the legitimacy of the transaction with an expert; which in Talmudic times might have meant as little as a couple of hours. As investors know all too well the stock market hates uncertainty and so do retailers. Not knowing until weeks later if one has truly made a sale can be quite disconcerting. The Mishna relates (Bava Metzia3:3) that the merchants of Lod rejected the opinion that price fraud is only actionable at a discrepancy of 1/3 as that same opinion allowed returns for the entire day.
A policy in which sales are final eliminates the concern of people using the object temporarily with the intention of returning it at a later date. Of course merchants may voluntarily waive their rights to certainly in sales. The Talmud terms such concessions as the mark of piety. It seems to me that consumers have benefited from an environment where competitive pressures have led to greater displays of piety.
Comments rabbijay@torahinmotion.org
Rabbi Jay Kelman is a Founding Director of Torah in Motion, an adult education institute dedicated to exploring the intellectual richness of Judaism and applying that wisdom to our everyday challenges. www.torahinmotion.org
Rabbi Jay who teaches Talmud and Ethics at TanenbaumCHAT a community High school of over 1,400 students in Toronto is a Chartered Accountant (CA) and writes a monthly column Money matters for the Canadian Jewish News.