Q: Can I charge one price for immediate cash payment and a greater amount for credit or payment in installments?

A: This common question of two-tiered pricing relates to the issue of ribbis, interest. Payment for an item is due upon consummation of the sale, and therefore the price quoted for immediate cash payment is typically viewed as the "true price." Therefore, if the vendor charges more for credit or payment in installments, he is considered as charging interest for the delay in payment. According to most authorities, a heter iska would be required to allow such a pricing system. Otherwise, one is only allowed to pay the lower, immediate cash price. [There are some authorities, though, who maintain that if the credit price clearly reflects the true market price, and the cash price is a discount from the true price, it is allowed. (Chochmas Adam 139:5)] In any case, it is permissible to quote a single price, allowing for credit or payment in installments.