General Rules of Business Practice

Choshen Mishpat 228:6

It is forbidden to defraud or deceive people in business transactions. Thus, a seller is required to inform prospective purchasers of any defect in his merchandise even if the defect would not affect the price in any way. It is also forbidden to claim that merchandise is of a particular well-known brand name when it is actually of another brand, even if the second one is of equal quality. Even if the seller is asking a reasonable price for the merchandise in question, it is still forbidden to make false claims or to deceive the buyer in any way. In all these matters, it makes no difference whether the buyer is a Jew or a non-Jew.

Gold's Menswear normally sells Italian designer suits for $600 and Brand-X suits for $300. Being short on cash, Mr. Gold announces a big end-of-year sale, with the designer suits to be sold for $150. On the day of the sale, he mixes some Brand-X suits in with the Italian ones, rationalizing that $150 is a very good price even for the Brand-X suits. Although it is indeed an excellent price, it is still forbidden to deceive customers in this way.

(לה) לֹא־תַעֲשׂ֥וּ עָ֖וֶל בַּמִּשְׁפָּ֑ט בַּמִּדָּ֕ה בַּמִּשְׁקָ֖ל וּבַמְּשׂוּרָֽה׃

(35) Do not commit a perversion in measures of length, weight, or capacity.

Choshen Mishpat 231:1,3,19

This is a particularly severe offense, since in order to repent properly one has to make restitution to everyone cheated, and it is generally impossible to locate each individual in order to do so. In such cases, one is advised to fund public projects (so that the victims may benefit from them) but this does not ham the full effect of proper restitution. It is prohibited to even own a perverted measure (e.g. broken commercial scale); one must either fix it or dispose of it.

Bava Basra 89a

The Sages taught that someone who keeps unfair weights or measures in his possession will lack sufficient means to provide for his needs, while one who holds to strict and exacting standards of honesty will be supplied with all his needs in full measure. Elsewhere they stated that a person who wishes to become wealthy should conduct his business dealings faithfully and ask for mercy from the One Who controls all wealth, as the prophet says, “Mine is the silver and Mine is the gold," says the God of Hosts Chaggai 2:8

Choshen Mishpat 231:14

The Torah requires us to give a small amount more than strictly required when weighing or measuring merchandise for sale

When a certain ben Torah in Eretz Yisrael opened a retail food store, he sought the advice of a great scholar as to how to conduct the business in the optimal Torah fashion. The gadol advised him to give away ten grams of merchandise for every kilo sold (i.e. 1 percent) in order to be sure to avoid inadvertent theft.

Choshen Mishpat 231:8

A merchant is required to measure his commodities in accordance with the local custom, without any deviation

In ancient times commodities were measured by the size of the container; some contained a “lug," a "kav," etc. The buyer would bring the appropriate container to the seller, who would fill it up. In some places the custom was to fill a container until it was overflowing, while in other places the custom was to level it off at the top. When dealing in commodities such as flour the difference was appreciable. The Sages ruled that it was required to fill a container to overflowing where the custom was to do so, even if the buyer agreed to accept a smaller quantity at a lower price. Conversely, where the custom was to level off the commodity one was not allowed to fill the container to overflowing, even if the buyer agreed to pay a higher price. The Sages were concerned that a visitor to the city might notice the transaction and mistakenly think this to be the local custom, and thus inadvertently come to cheat or be cheated in his own local transactions.

Choshen Mishpat 231:2

The leaders of a community are responsible for appointing officials to inspect businesses and examine their measures and scales, with the power to fine or punish violators at their discretion.

Choshen Mishpat 228:9

It is forbidden to adorn and embellish merchandise in order to deceive customers into thinking it is more valuable than it actually is.

Examples:

Polishing old dishes to make them appear new.

Mixing a few spoiled fruits in with good ones in order to sell them for the regular price.

Choshen Mishpat 228:18

A business may use " gimmicks” to attract customers provided there is no deception, since the competitors may be doing so as well. (A storekeeper may give out nuts and candies to children in order to accustom them to buy from him)

Ibid.

Advertisements should portray the true value of the item and not be misleading. Similarly, when a salesman is trying to convince an individual to buy a product he should portray the true value of the item without any deception.

ibid.

One may charge less than the going price for an item in order to attract customers, and his competitors have no right to attempt prevent him from doing so.

Talmud Yoma 83a

Any form of market manipulation that causes the price of essential commodities to rise excessively is forbidden. He who does is branded as wicked, and the leaders of the community have in authority to appoint officials to punish such individuals at their discretion, (as with those described in source 7) who use deceptive weights and measures. They are considered as reprehensible as those who lend money at interest, and they transgress the commandment to Let your brother live with you (Vayikra 25:36).15