I am an interior designer and I charge $100 per hour for my time. I spend time with the customer discussing their preferences as well as visiting specific stores looking for the right tiles, furniture, and moldings etc. As I was shopping around one day (without my client), one of the local vendors offered me a “kickback” of 10% for every customer that I bring through the door. This is obviously very inticing as my customers spend tens of thousands of dollars every month. Presently, I am accustomed to shopping around at many different stores for my purchases. I assume if I had this arrangement I would use this store much more often, if not always.
Q. Am I allowed to take the “kickback” in addition to my fee from the customer?
Actually, as a matter of Halacha, accepting kickbacks can lead to a number of potential problems. It is important, that whenever a decorator, a builder, a buyer, or a referring professional entertains the thought of taking a kickback, they must use extreme caution so as not to transgress any of the following four potential issues:
Double Dipping. Many times, when a specific vendor is dealing with a decorator and offering a kickback, the added “expense” inhibits the vendor from offering the customer any type of reduction or discount which they would typically offer the average customer. Consequently, the customer is “paying” the decorator the lost discount on top of the negotiated hourly fee. Since that was clearly not the agreement1 the decorator is receiving a higher fee than was negotiated at the customer’s expense. This is obviously Gezel.
Embezzling the hourly fee. A decorator’s job is to represent and protect the client in an unfamiliar marketplace. She is expected to shop and negotiate on behalf of the buyer and work with the customer’s sole interests in mind. A decorator that allows their decision-making abilities to be influenced by a potential kickback is not fulfilling their obligation to the customer. The fee being charged would therefore be undeserved, and must be returned.
Lifnei Iver Lo Sitein Michshol. A person that gives an Eitza She’eino Hogenes; a suggestion that is unsuitable, transgresses the Issur of Lifnei Iver.2 The Toras Cohanim expounds and writes “Lest you say ‘I am giving him a good Eitza’ behold the [truth] is in the heart as it says ‘V’Yareisa Me’Elokecha’”. In addition, The Torah applies a unique curse to one that misleads the blind.3 Therefore, if a decorator recommends a certian vendor based on a potential benefit, if the Eitza is not proper they would transgress this Issur.
Shochad. The Issur to take a bribe in its simple form is directed to Dayanim. However, the Poskim write that the prohibition is carried over to anyone who has been put in an authoritative position to make decisions for, or in relation to others.
The Pilpula Charifta4 writes:
“….and I write this as instruction to those that have been placed in a position of authority over the general population, even though their decisions are not [involving] Din Torah, and they were not appointed for that reason, even so they should be careful not to accept presents to effect their decisions”
Rav Nissim Karelitz5 takes this one step further and Paskens that a teacher may not send an expensive Shloach Manos to a the administration of a school that is having difficulty making payroll and who issues paychecks to the teachers on an arbitrary basis. This would be viewed as shochad as the administrator may allow this financial consideration to influence his decision as to who would get their paycheck first.
In addition6, Moisdos must be careful not to allow financial considerations affect the quality of Chinuch. For example, if there is a child that should be dismissed from a school and the Hanhala does not do so because the parents are supporters of the Yeshiva, this may be a violation of “Lo Sikach Shochad”.
In summation, these issues can come to light in many areas of business and daily life. Whether it is a mortgage broker shopping for a loan, a stock broker who is pushing a specific stock, a real estate agent who is showing a client a number of different properties, or a store-owner or salesperson showing pieces of jewelry or articles of clothing. Extreme caution must be used to ensure we are looking out for the benefit of the customer and not being influenced by the level of the commission or kickbacks. As in many areas of Choshen Mishpat, if this arrangement is clearly explained to the clients, it would be acceptable.
This article has been written by The Bais HaVaad L’Inyonei Mishpat and is meant for awareness purposes only. A slight variation of the facts can significantly change the Halacha. For Choshen Mishpat related questions or services please contact The Bais HaVaad office located on 32 Fifth St. in Lakewood N.J. or call 1.888.485.VAAD(8223) or email info@BaisHaVaad.com
1 which is clear from the fact that the customer has the right to shop at a store that would not offer this benevolence to the designer at the customer’s expense
2 תורת כהנים פר’ קדושים (י"ט:י"ד) ע"ע מסילת ישרים (פרק י"א ד"ה בענין נתינת העצה)
3 דכתי’ "ארור משגה עור בדרך" (דברים כ"ז:י"ח)
4 על דברי הרא"ש פרק זה בורר בסי’ י"ז (אות ש’)
5 הובא בספר משפטי צדק (סי’ ט’ בביאור משפט ד"ה צריך הדיין ליזהר)
6 כך מוסיף שם מעצמו