Halachos of Marketing

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General Marketing Considerations

  1. The marketing profession poses the difficulties of ensuring one does not lie about a product or deceive a potential customer.[1]

False Advertising

  1. One is not allowed to use superlatives to present a product if the superlative will likely deceive a reasonable person.[2]
  2. While there is no problem with accurately presenting the positive aspects of merchandise (assuming a reasonable person will not be deceived), sellers are obligated to clearly disclose any defects, deficiencies, shortcomings, or imperfections in their merchandise.[3] This is true even in a case where admitting the defect would not invalidate the sale.[4] This is also true even if the merchandise is being sold at a fair price for the condition it is really in. [5] There is an opinion, however, that if the general practice is for the buyer to inspect the merchandise before buying, the seller does not have to reveal the defect and it would be up to the buyer to check the merchandise.[6]
  3. Signs that state: "Clearance sale", "everything for sale", and "major sale" which aren't entirely accurate and honest are absolutely forbidden and a breach of genivat daat. For example, if the sale is only for many items in the store and not everything, writing "everything for sale" is a lie to trick the buyer to enter. Writing an old price and the actual cheaper price is forbidden because of genivat daat. In summary, any sign that's intended to trick buyers by causing them to make false assumptions is forbidden.[7]
  4. Paying a newspaper or site or the like to print an advertisement or something positive about one's institution unless it is designated as an advertisement is genivat daat. If the reader is fooled into thinking that it is a regular article and not an advertisement, he will be interested and convinced more easily.[8]
  5. An institution that advertises that it has more students than it really does or has activities and functions that it doesn't have is violating genivat daat.[9]
  6. It is forbidden for a gabay tzedaka to say that he is raising for one cause such as "hachnasat kallah" if in fact he is raising for another cause. Doing so is lying and genivat daat.[10]
  7. Positing a sign that something is for "Sale" when in fact it is at the going marketplace price is genivat daat.[11]

Overcharging in Comparison to the Market

  1. When dealing with overcharging in the marketplace, the main concern is the prohibition of Ona'ah (overcharging). To see more of what constitutes Ona'ah, see the page dedicated to it here: Onaah.

A Buyer's Responsibility

  1. It is a buyer's responsibility to gather relevant information on products he intends to buy.[12][13]

Telemarketing

  1. A telemarketer who, as a desperate gesture, insults the consumer is in violation of onat devarim.[14]
  2. Calling at an inconvenient time, such as dinner time (all the more so in the middle of the night), such that the consumer will interrupt his dinner to pick up the phone is a violation of onat devarim. Furthermore, the telemarketer who tries to convince consumers who aren't interested to buy the product are in violation of lo tachmod and lo titaveh of the consumer's money.[15]
  3. Negotiating for a discount isn't lo tachmod or lo titaveh since the seller is willing to sell it at the right price and setting a price isn't a final decision rejecting the offer. However, if the seller says he is convinced of the price and isn't willing to lower it, negotiating or convincing that resort to empathy or emotion or the like are a violation of lo tachmod.[16]
  4. Soliciting for a charitable cause even using persuasive tactics isn't a violation of lo tachmod or lo titaveh since you are helping them fulfill a mitzvah. However, persisting and pestering a potential donor are onat devarim.[17]

Sources

  1. Chullin 94a, The gemara discusses the concept of gneivat daat where the owner withholds critical information from the potential buyer. The gemara quotes many different cases regarding cases of gneivat daat.
  2. Economic Public Policy and Jewish Law by Rabbi Aaron Levine 1993 p. 76-77
  3. Shulchan Aruch C.M. 228:6, Geneivat Da'at: The Prohibition Against Deception in Today's World, 2002 article by Professor Hershey H. Friedman
  4. Pitchei Choshen v. 5 ch. 12 fnt. 2
  5. Sama CM 228:7, Bear Heitiv CM 228:4, Maharsha Chulin 94a. The Maharsha poses a case where a seller withholds information about a defect in an object he is selling. Despite the fact that he withholds this information, the seller still sells the object at a lower price (which is fit for the object with the defect). This is still genivat daat even though there is no onaa because the buyer believes he is getting a bargain on the object as he does not know about the defect. This is confirmed by Kuntres Onat Devarim UGenivat Daat by Rabbi Efraim Belisur p. 13 based on the Divrei Chamudot Chullin 94a.
  6. Hilchot Mishpat, Section 1, 245-6
  7. Kuntres Onat Devarim Ugenivat Daat p. 14
  8. Kuntres Onat Devarim Ugenivat Daat p. 15
  9. Kuntres Onat Devarim Ugenivat Daat p. 15. See Igrot Moshe CM 2:19
  10. Kuntres Onat Devarim Ugenivat Daat p. 16 citing Shevet Halevi 2:119 and Pitchei Choshen Onah ch. 15 fnt. 22
  11. Hilchot Mishpat v. 1 p. 240
  12. Economic Public Policy and Jewish Law by Rabbi Aaron Levine 1993 p. 77
  13. Igros Moshe, Yoreh Deah vol. I, 30-31, Rav Moshe Feinstein was asked a question if it is permitted to soak livers in water in order to make them look more appealing to potential customers. Rav Moshe responded that there is no concern that the customer is being overcharged for extra weight that the liver absorbs because the person is able to see what he is getting. Rav Moshe also responded that this does not constitute gneivat daat for multiple reasons. Submerging the liver in water is not necessarily going to make the liver look freshly slaughtered. Additionally, Rav Moshe stresses that a customer has the responsibility to inquire about the objects origin and current condition. (Ideas from Rabbi Ari Wasserman)
  14. Tradition 38:3 2004 article by Rabbi Aaron Levine p. 11-12
  15. Tradition 38:3 2004 article by Rabbi Aaron Levine p. 11-12
  16. Tradition 38:3 2004 article by Rabbi Aaron Levine p. 9-10
  17. Tradition 38:3 2004 article by Rabbi Aaron Levine p. 13