Q: I give a course via Zoom, and I need to know in advance how many people will participate, because if there are more than 100 participants, I must pay for expanded capacity. I advertised, therefore, that those who sign up and pay by a certain date will get a 20% discount.
Several participants took advantage of this offer. Recently, however, a participant pointed out that there might be an issue of ribbis (forbidden interest) with this offer.
Is he correct? If yes, what can I do to rectify what I did, and how can I set up an acceptable sign-up system for the future?
A: In Halachah, your role vis-à-vis your course participants is categorized as that of a po'el (worker), and the participants are considered to be "renting" you for the time that you give the course (In next week's issue, iy"H, we will discuss the halachos that pertain to a kablan, who is hired to complete a task and is not bound to a specific times).
There are three times when an employer can pay a hired worker: at the time the payment is due, before it is due, or when it is past-due.
If an employer pays a worker at the time the payment is due, he is allowed to pay more or less (if the worker agrees to give a discount) than he owes; since he is paying on time, no loan is being extended in either direction, so ribbis is not an issue.
If the employer delays payment, it is viewed as though the worker is extending him a loan. If he then pays more than he owes, that additional payment is ribbis.
If the employer advances payment to the worker in order to receive a discount, he is essentially lending the money to the worker by paying him in advance. Since he is deriving financial benefit from that loan, in the form of a reduction in price, this is an issue of ribbis.
In your case, participants who paid early extended you a loan of sorts in order to derive financial benefit in the form of the discount, which is an issue of ribbis.
But Chazal permitted a worker to offer a discount if certain conditions are met.
If the worker begins working immediately upon receiving payment, he is permitted to give a discount (Shulchan Aruch Yoreh De'ah 176:7-8). In such an arrangement, although the payment is not due yet, it is viewed as payment and not as a loan.
In your case, since the participants paid long before you actually delivered the course, you were not allowed to offer a lower price for those who paid early.
What you could have done is offer a discount to anyone who prepays up to the time that the course began.
Although the poskim seem to suggest that the aforementioned arrangement is permissible only if the worker begins the work and continues until he is finished without breaks (see Shu"t Chelkas Yaakov, Yoreh De'ah 79-80, and Chelkas Binyamin 176:86), since your type of course is typically delivered once a week, it is considered as though you are doing all the work consecutively (Mishnas Ribbis, ch. 10 fn. 2).
In regard to what you already did, once you received the payment, you may be mochel (forgive) the 20% additional work you did for the participants who did not pay for that work because of their early payment (see Yoreh De'ah 160:5), and they are not required to pay you the rest of the money, even latzeis yedei Shamayim (Shulchan Aruch Harav, Dinei Ribbis 5).
For the future, you should not offer a discount for those who pay early. Even though your primary reason for offering the discount is not to receive their money early, but only to ensure that you are certain about their participation, it is not evident that the discount isn't because of the loan as well.
Obviously, you may offer a discount for early registration, but not to tie that discount to early payment. If you would like to ensure that those who register cannot back out, you may demand a non-refundable deposit upon registration. If this is the offer, then even if the participants decide, of their own accord, to pay in full upon registration, there is no issue of ribbis because they could have paid later, and the discount was for early registration, not for early payment.
Another option is for the payment to be in full upon registration, but on condition that you will not access the money immediately; rather, it will sit in the bank until the course actually begins.