A summer camp in my neighborhood recently made the following offer: If you pre-pay the summer camp tuition by Febuary 15, the camp tuition will be $900. However, if you pay at the normal time – in June or July – the summer camp tuition will be the "regular price" of $1200. This seems to be a common practice among summer camps, judging by the many ads in the papers.

Q: In essence, the camp is giving you interest of three hundred dollars in exchange for borrowing your money from Febuary 15 until camp starts in the summer. Is this a problem of ribbis?

A: The Gemara in the fifth perek of Bava Metzia seems to prohibit such arrangements.

The issue depends on whether the camp is offering the discount in lieu of their access to the pre-payment monies or if the pre-payment is preferred for other considerations;  for example, to insure that parents don’t back out, or for ease of collection of tuition. Mishpat Shalom 209.25 permits a deposit with two conditions. The payment must be small enough to make it very clear that the intent is only to secure the deal, and the discount must be completely unrelated to the advanced funds.

It would seem that if the camp offers the early bird discount only if parents pay early in full, or even if they require a large deposit, the above conditions would not necessarily be satisfied. As such, it would be difficult to permit.

One other potential heter is the corporation leniency. This leniency mandates that corporations are not bound by the usual restrictions of paying ribbis. However, since most small day camps are not incorporated, this rule would not apply, and the prohibition still stands.