New York – The Elal Pricing Error: A Halachic Analysis

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    New York – This weeks El-Al tickets at 1/3 of normal pricing sparked a number of Halachic Shailos posed to Rabbis as to whether there is an obligation to reverse the sale, since it was due to a mistake.

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    El Al has caught on to the error and fixed it, but in the meanwhile many people were able to take advantage of the error and purchase tickets.

    Was it permitted to take advantage of this error?

    Are those who purchased tickets obligated to offer to return them to El Al?

    In general, once one knows that an item is obviously mispriced, is one allowed to take advantage of that error and purchase additional items, knowing that the vendor will either not know about it or will be compelled by law to honor the price?

    If I see that a vending machine says that a can of soda is priced at $1.25 and dispenses a can after I put in $.25, am I allowed to put in more quarters so that I can buy more cans? (Even if we assume that I do not have to return the first can, where I had intended to pay full price, does that mean that now that I know that the machine is mis-programmed that I can buy as many more as I like?

    ANSWER:

    GENERAL CONCEPT OF ONAAH

    We do find a concept in Halacha called Onaas Mamon. This concept, found in chapter 227 of the Choshain Mishpat section of the Shulchan Aruch, invalidates a sale when the price is either 16.7 % above or below the market value of the item. Although landed properties would be excluded from this law, it does apply both to movable properties as well intangibles, such as a ticket.

    DEBATE BETWEEN BAIS YOSEPH AND SHACH

    The halachic authorities debate as to whether the law is applicable when there exists a range of prices and no set market value (See Bais Yoseph CM 209 who says there is no Onaah in such cases while the Bach and Shach state that there is, nonetheless). At first glance, it may seem that even though secular law may dictate that the sale is valid (we will find out if this is true shortly), there may be an halachic obligation to undo the sale. Rav Vosner in Shaivet HaLevi Vol. V # 218 concludes that there is Onaah when there is no set price in the market, in accordance with the aforementioned Shach and Bach.

    The way airlines price tickets though, deserves a bit of scrutiny. A certain percentage of tickets are set aside to sell at a certain price. Another percentage are sold at a higher price. The system is continued until the very last tickets are sold at a very high price. One could argue that this pricing structure in and of itself knocks out airline tickets from falling under the category of Onaah, and this, in fact, is the position of a number of Poskim.

    THE NOTION OF KIM LI TO RULE LIKE BAIS YOSEPH

    There is also an important concept called “Kim Li k’hanee Poskim” which in essence states that,when holding on to the moneys or items already (Muchzak) a person has the right to say, “I know that the law is in accordance with the Poskim that hold X (See Beis Shmuel CM 68:19).” In this case, the purchasers of the Dan’s Deals can say that, in their view, the law is in accordance with the Beis Yoseph.” While one cannot utilize this principle before one has the bought ticket in hand in order to permit the purchase, after one has done so there is no obligation to undo the deal.

    OTHER FACTOR TO SAY NO ONAAH

    There is another argument, although perhaps not a strong one, that the laws of Onaah do not apply in this case. Rabbi Yoseph Shaul Nathanson, author of the Shoel UMaishiv (Edition IV 3:137) rules that something sold publicly in an auction is not subject to the laws of Onaah. A website would probably have the same status on account of the public nature of the sale (see his arguments in the responsa to understand the correlation).

    BUT WHEN THERE IS A GENUINE ERROR

    While there may be great debate as to whether there is or there isn’t a notion of Onaah where there are no set prices and no official market price, some authorities are of the position that it doesn’t matter, and when there is a mistake in the pricing – it is to be considered Onaah –regardless (See, for example, Pischei Choshain Vol. IV p. 300 paragraph 4 “Uv’chol haOfanim.”) This last point would negate both of the above arguments.

    IS THIS PART OF THE PRICE?

    There is a third factor, however, which may be very pertinent here. If one looks closely at this particular sale, the price of the ticket was not, in fact, below market. The reason why the total cost of the ticket was so much lower than usual was the fact that the fuel surcharges were not included in the pricing. When someone does not charge an additional fee that is not part of the sale, but rather is construed as an extraneous cost, not charging it would not negate the sale (See Responsa of the Rosh 13:20 for a similar issue).

    The situation may be analogous to a store that charges an entrance fee and then makes sales. If the store owner appointed a person who did not collect the entrance fee and the person did not sneak in, there would be no obligation for the purchaser of the item to pay that entrance fee.

    While some may argue that the fuel surcharge is an accounting device, the fact is that technically it appears to be legally construed as an extraneous fee.

    Why do they charge these surcharges? Travel experts list a number of reasons:

    1] So they can charge travelers for allegedly “free” frequent flier awards and companion tickets with part of the fare.

    2] To make their fares appear much lower than they really are.

    3] So they can lower the fare basis on which they pay commissions to travel agents.

    4] So they can circumvent the law and raise the fares on routes where fare increases still need some sort of outside approval.

    In the United States itself, domestic carriers are not allowed to have these two separate fees, but international carriers are allowed to do so It is this author’s view, the fact that it is technically not part of the sale itself, has implications both ways too – and one would not be forced to undo the deal from a halachic perspective.

    The case of the vending machine would be very different because the moneys placed in the machine facilitate the sale of the item itself. It would be forbidden to take advantage of that situation, where the machine is giving drinks for 25 cents instead of the regular cost.

    GOING BEYOND THE LETTER OF THE LAW

    Is there an obligation of going beyond the letter of the law here and return it anyway?

    It is this author’s opinion it is recommended that one go beyond the letter of the law when there are individuals who would undergo financial distress in such circumstances. Here, however, each individual should make the choice himself.

    The author can be reached at [email protected]


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    49 Comments
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    MAYERFREUND
    MAYERFREUND
    11 years ago

    According to the rambam hilchos shabos perek lamed halocho tes vov.
    השבת ועבודת כוכבים ומזלות כל אחת משתיהן שקולה כנגד שאר כל מצות התורה. והשבת היא האות שבין הקב”ה ובינינו לעולם. לפיכך כל העובר על שאר המצות הרי הוא בכלל רשעי ישראל. אבל המחלל שבת בפרהסיא הרי הוא כעובד עבודת כוכבים ומזלות ושניהם כעובדי כוכבים ומזלות לכל דבריהם.
    All halochos of the torah apply only to Jews that are shomer shabos.

    TheRealJoe123
    TheRealJoe123
    11 years ago

    I was to late to take advantage of the deal, however I would have grabbed it if possible, the way I look at the deal is that nobody cheated the system by putting in false info etc. The great price was posted on these sites and people simply clicked and bought. EL AL and the other companies affected all have plenty of lawyers to see how to cover their backside’s.

    DrMSPhD
    DrMSPhD
    11 years ago

    Thank you Rabbi Hoffman for a clear breakdown of the Halachas involved.
    Many commentators on the original story just base their “halachos” on their feelings without knowing what the real halachic issues are.

    Next – How about a Halachic analysis of blurry glasses, kosher diapers, extreme chumros, baal toisef, and ripping off unsuspecting Jews while making believe you are lishmah.

    ChachoMoe
    ChachoMoe
    11 years ago

    Thanks R Hoffman for another excellent analysis, especially regarding the ‘fuel surcharges’ which is up to debate, whether its a seperate fee; I humbly believe its very much part of the very direct cost of the fee, and one of the main reasons most Co. (i.e.production to trucking/delivery serv.) seperate it, is being that fuel costs is, as we all know, very not consistent and fluctuates, Hence, allowing to keep one part of the (operating, insurance, etc. cost) fee consistent, while charging the fuel according and based on the present market value.
    Perhaps, airlines have a different method of accounting.

    sasregener
    sasregener
    11 years ago

    Food for thought….Do you really want to travel to eretz hakdoishe of all places and go to mekomos hakedoshim to daven and learn knowing that you may have bought a ticket that might be oonaaa? Think about it…maybe to poland but not eretz yisroel.

    shredready
    shredready
    11 years ago

    as always very clear thinking from Rav Hoffman

    this happened to me and others who sell on amazon when a software error priced many items at .01 amazon cancelled most of the orders

    Gum-Zu-Lechumra
    Gum-Zu-Lechumra
    11 years ago

    I wonder: If ElAl runs a separate flight for all the mistaken ticket holders but doesn’t supply the fuel for the flight since they haven’t paid for it , if that would be Halachically acceptable?

    UseYourHead
    UseYourHead
    11 years ago

    With regard to fuel surcharges, even though they are *technically* separate from the base fare, the reality is that EVERY airfare includes a fuel surcharge – you simply cannot buy such an international ticket without a fuel surcharge – so in truth, the total fare (including fuel surcharge) is the “actual” price of the ticket.

    Facts1
    Facts1
    11 years ago

    “Kim Li” is not an heter to keep another person’s money, its just binds bet din’s hand. If you dont know halacha how can you say kim li?

    Rabbi Yair Hoffman
    Admin
    11 years ago

    Dear Rabbi Hoffman,
    Yasher koach for your very clear analysis. I’d like to share with you the following.
    Upon, after purchasing the tickets and then finding out the pricing was in error , I as well had the same issues of a shailo of onaah, taos yisroel, mekach taos, yashrus and ethics, as well as on top of that setting a proper example to my congregants. I called El Al in Eretz Yisroel and spoke at length with them, even insisting they double check with higher ups which they did, and they were adamant they want the buyers to keep the tickets, to come to Eretz Yisroel “and enjoy the trip”. The individual I spoke with explained he understands my concerns, that he “is the same way in never wanting something at someone else’s expense nor anything with even a hint of lacking yashrut, but there is no issue here as far they are concerned”. He told me” not to worry about us” (El Al) , whether they recoup the damage from Expedia or however they deal with it , they will be okay. I asked him would they be willing to double check with El Al’s official Rav, he said there is no need, that is not part of his jurisdiction, rather theirs, and he is telling me “110 percent” El Al wants me to do it.

    targetcapital
    targetcapital
    11 years ago

    There is no way that EL-AL con absorb this type of error. I would suggest that they give the booked ticketers a credit of the $400. from the fair and just charge them $1200 for the flight.

    11 years ago

    I happan to think my opinion only.readers are out to judge and make the lucky buyers feel guilty on the incorrect published fares. Company however do have insurance for loss. To me its luck of the draw.ELAL are not a shommer shabbos run company so cant understand the uproar on the halacha. Yes i would of loved to of been one of those lucky ticket owners, i guess was not barshat. I will try the lottery “hay u never know”. Hope the geula will come before October and we will be traveling free. I would not feel guilty. Does not cost to fargin another yid. Money is in the hands of the beholder. Safe trip!

    Erlich
    Erlich
    11 years ago

    Rav Hoffman should clarify if the dinim of onaah apply to an Akum.

    11 years ago

    Some other factors:
    -99% of flights have empty seats, so buying an airline seat seems to be different than buying a physical good. In fact the whole basis of priceline is to sell bargain basement seats and hotel rooms as even getting a few dollars is better than nothing.
    -There have been many other unadvertised fare sales in the past, is it the purchasers responsibility to figure out when it is a sale and when it is a mistake when this is a market where the price of a ticket can vary from $0 to $2,000?
    -Can consumers be expected to understand a fuel surcharge?
    -The fact that when American sells you a mileage ticket to fly on El Al they do not collect a fuel surcharge seems to indicate that the fuel surcharge is not an essential part of the ticket. True that when El Al sells a mileage ticket it is bundled, but you can see that booking via other sources can leave out a fuel surcharge. Why should the consumer assume that the fuel surcharge is an essential part of the ticket? In fact the flight I booked was sold by El Al but has flights only on American and Swiss. Often times when you book via other carriers a fuel surcharge may not be collected.

    Halaivy
    Halaivy
    11 years ago

    As long as El Al Excepts those tickets it’s Sobir Vekibail which means they have calculated that keeping their word is worth for them not to loose money it’s not called Ona’ah.
    That is also the common practice in the business world that the seller excepts a misquote even when loosing money to show integrity.

    mbaumgarten
    mbaumgarten
    11 years ago

    Let’s get real. Everyine who bought the El Al tickets, which were snapped up immediately, knew that the price was unbelievable. For frum yidden not to return the tickets is a chilul Hashem, plain and simple.

    P.S. My opinion in no way has anything to do with the fact that by the time I found out about the tickets they were already gone.

    mugsisme
    mugsisme
    11 years ago

    Everyone is making such a fuss over the El Al tickets; those who got the tickets saying it’s fine and those who missed out saying it’s wrong. I just
    wonder if people are just as careful with all their money affairs. You know, like charging cash to avoid paying taxes; gettingMedicaid, food stamps, section 8, etc, when you really make more.

    YonahLevi
    YonahLevi
    11 years ago

    R’ Hoffman, why wouldn’t you suggest that individuals go beyond the letter of the law here? If it’s truly a case of Onaah, and there is a chance that it could be…do you think that Hashem turns a blind eye when the victim (who, in this case, did nothing wrong) was a rich company rather than a poor shopkeeper? What if all of El Al’s losses compounded from this fiasco result in an employee losing his/her job? How many trips to Israel is that worth? Who is wise? He who sees the consequences of his actions.

    On the flipside, can we imagine the Kiddush Hashem that would be made if frum Jews who bought these tickets would return them?!?! The goyishe velt would be incredulous!

    YossiGinzberg
    YossiGinzberg
    11 years ago

    Forgive me for being simplistic, but this entire discussion reminds me of the reason for 9 Av, “she’asu dineihem din”. Irrelevant of what the Halacha of Onaa says, this will be a BIG chilul Hashem as only Jews bought in here, and the media will certainly publicize this. The Mishna itself says that in Chilul Hashem Maizid and shogeg are the same! For a savings of a few hundred dollars, are you willing to be part of such an aveirah? I assume you wouldn’t buy the cheapest Tefillin, why buy a trip at the price of Chilul Hashem?

    Pipk11
    Pipk11
    11 years ago

    In dinei momonos its always a matter of the way business is conducted in that place.

    let El Al go after the company who posted the fares wrongly.

    If I purchased something from a salesman who made a mistake on the price and I have it in my house no one is coming to get the product back and the salesman is responsible. Case closed.

    Besides when these big companies make a mistake and over charge, it takes years and class action lawsuits and if your lucky they agree to give the money back.

    Unfortunately this is our business culture today.

    I hope they are smart enough not to cancel the tickets.

    abe2np
    abe2np
    11 years ago

    First of all I wonder if the scales were tipped and I made a mistake on my ticket would they be so accommodating to Halacha?
    2. “Gum-Zu-Lechumra” I paid for a “Flight”.
    3. Can anybody explain to me where the Chillul Hashem is? People make this a thing of emotion this is business as far as I know there is no emotion in business.

    BPeer
    BPeer
    11 years ago

    What would be he halacha if I put money into a vending machine and to cookies drop out in stead of one?

    maitiv
    maitiv
    11 years ago

    I think the article gave a very good presentation of general rules on Ona’ah. This case, however, involves many other issues. Yield management pricing, practiced by all airlines renders the concept of Ona’ah irrelevant, sicne the vendor has chosen to price according to changing criteria. Secondly, here the question is not of Ona’ah, but a new technological system for selling in which no human being is constantly adjusting prices, but rather they are being computer calculated. Now the question is, if a corporation chooses to delegate control of pricing to a computer and its websites, do they have to stick to the stated fare. And their “fine print” lists all kinds of stipulations and limitations. If, despite adhering to all those limitations, they are still legally bound to convey passengers at the low price, then this new question become relevant. Can the mechila of the surcharge by automated device, empowered by the airline, obligate the airline. Or would we say that even if contract law compels the airline to honor these tickets at low prices halacha does not accept the mechila of an automated device . I don’t think anyone has yet written a teshuva about this.

    Ben_Torah_Leshma
    Ben_Torah_Leshma
    11 years ago

    This article and comments are a chillul Hashem! A Frum Jew, should offer EL AL the opportunity to cancel the sale voluntarily.Think of the Kiddush Hashem that would create.

    Bottom line, EL AL (or someone working on their behalf) made a HUGE financial mistake. Most people grabbing up tickets either KNEW this or should have known it. Its going to cost them big, which by the way, they will have to pass the cost on to other EL AL flyers in order to recoup the cost.

    It is unethical and a Chilul Hashem, to hide behind Halacha, by suggesting that if a computer system screws up by charging hundreds of dollars less per ticket, then we dont have to worry about taking advantage of it.

    What an insensitive and shocking attitude. For example, if your local grocer, or hard ware store website had a glitch, would you buy up as much as you could?

    How detached have we as a Jewish people become to quote the holy Achronim and halachos of Onah, when clearly, this is a case of someone messing up unintentionally.

    That someone? A Jewish Airline.

    What about the tens of thousands of Secular Jews who read about how Frum Jews are comfortable with justifying taking advantage?

    Shame on us.

    Normal
    Normal
    11 years ago

    V’ohavta Lraecha Kmocha. Very simple.

    Imagine you have a web site selling something like books or jewellry etc. You accidently enter one price for one product as $1 instead of $100.

    Imagine 50,000 people purchase 10 of them, and if your markup is 50%, you could be $24.5 million out of pocket. Are you expected to sell your home so you can fulfill the orders, because you made a simple mistake?

    11 years ago

    I would believe these Yidden who got the tickets and are so convinced they are in the right, IF the would be so happy and pleased if it was THEM who made the error and someone else got over On THEM and took advantage of their error. In that case these very same Yidden would be screaming and crying about the chilul Hashem taking advantage of them. HYPOCRITES.

    mendov
    mendov
    11 years ago

    As I mentioned before, fact is, in good faith I thought (as did my son) that EL AL knew something we didn’t. That war was imminent and that they had better sell as many advance tickets as possible. I was truly apprehensive about their purchase and went ahead, feeling ashamed at my lack of faith. Never for one second did I feel that there was a pricing error. Call me foolish, but Jet Blue etc also has these “quick deals” that they offer for reasons that suit them.
    So does “intent” and “knowledge” make any halachic difference here (okay,maybe only for simpletons like yours truly)?

    A side comment (because 2 wrongs do not make a right) has anyone been successful in getting a misbooked “nonrefundable” ticket that was booked in error refunded? I have never had success. The airline said it was not their error.

    cpsey
    cpsey
    11 years ago

    Just for all of you “POSKIM” out there that think everyone did this knowing that ELAL was loosing out majorly.
    We, had no clue! We assumed that this was a blitz fare reduction and there were a few select times it was going to be available for and we Chaped Arein. If there was any chashash that someone was loosing out there would be no way we would have booked these tickets.

    FYI, ElAl is for sure using this as an opportunity to use this as great PR, and at least now,I’ll be able to go and visit the holy land with my family for something that is affordable.

    11 years ago

    I did not get any of these tickets, but I wonder why some posters here are so negative about Acheinu Binei Yisrael.

    First, while possibly unintended by the companies involved, this is not a “major financial mistake”.
    A) The tickets were not $1 each.
    B) Many industries run “loss-leaders” to drum up business.
    C) The companies have insurance and lawyers (and the State of Israel behind El Al) for this reason, among others.

    As well, the tremendous publicity they have already received, as well as the similarly significant good-will (and lack of negative publicity) could more than make up for this snafu, which might explain why El Al answered Pappa Bar Abba that El Al is fine.

    Also, these comparisons to mom-and-pop shops are absurd. If you “buy” a sofa for $1, you have almost certainly made the proprietor incur a significant loss on that sale. However, an airline seat, in theory, is more socialist. If they happen to have enough last minute customers paying the much-higher walk-up rates, that plane will bottom-line end up not losing them money.

    I do agree it is a kiddush Hashem to call up and offer to allow them to cancel it, though I’d think it is also lifnim miShuras HaDin to do so.

    Shaul in Monsey
    Shaul in Monsey
    11 years ago

    Amazing how most of the ticket holders faced with this nisayon are looking for a justification (read, excuse) to keep and use the ticket rather than admit that ethically there is no justification for taking advantage of anyone’s error – yid or goy.

    7373
    7373
    11 years ago

    Sign of chapter11

    7373
    7373
    11 years ago

    EL-AL changing name to PayPal

    11 years ago

    I think there are more aspects to this story:
    The company that was hired to represent ElAL and place thes prices made an error. I think halachically if someone quoted you a price in error , they are not mechyav to give it at that price. Over hereElal gave them the fares neccesary and these guys goofed. It was not ElAl’s fault as such would e a mekach taus, howvere you do have dina d’malchusa dina which states a sale is a sale, and also you have the fact that ELAL announced that they will honor thes tix.
    Why hasnt ELAL come out publically with a statement yet?

    Shlomo2
    Shlomo2
    11 years ago

    Saying that dina d’malchussa is matir ta’us yisroel, geneivas yisroel, or geneivas akkum is like saying that a secular divorce is matir aishess ish.