Hot Off the Hotline: Commerce on the Web Revisited

This article is a further clarification to the Hot off the Hotline question…

Q: On Shabbos does an observant Jew have to close a website that is selling products online?

Based on information that the Star-K received from two credit card companies, Rav Heinemann had answered that since purchases are accomplished by entering a credit card number, whereby the bank immediately transfers funds from the purchaser’s account to that of the vendor, web commerce would be prohibited on Shabbos.

However, many of our Kashrus Kurrents readers informed us that this information is erroneous regarding weekend transactions. After much research to further clarify this issue, Hot off the Hotline is presenting the corrected version of how credit card business is transacted generally, and specifically how it is transacted on the weekend.

When a consumer makes a purchase by credit card on a web site, a number of steps take place before the money actually leaves the purchaser’s credit card account and reaches the vendor’s bank account. A consumer goes online to a web site and decides to make a purchase. Step one is for the consumer to submit his credit card number online. Almost automatically the credit card account is “checked” to see that the credit limit has not been exceeded. If this is the case, an authorization number is issued to authorize the sale. Nothing has been transferred yet. Once the sale is approved, the next step takes place – processing the sale. This means that the purchaser’s credit card is debited and the vendor of the website’s bank account is credited. This means that the credit cards credit line allowance is reduced and the vendor receives payment.

Credit card sales are processed by specialized companies known as “processors.” Processing used to be done by the banks themselves. Today, most banks do not do their own processing. Bank of America, Wachovia and Wells Fargo still do their own processing. The job of the processor is to act as a facilitator between customer and vendor. The processor is the clearinghouse of sorts which takes the money out of the credit card account and puts it into the vendor’s account. The processor usually processes a number of transactions at once. Processing a number of credit card transactions at one time is known as batching or submitting a batch report.

If you would study your credit card bill you will see two dates: the sale date and the post date. The sale date is when the sale was authorized while the post date is when the sale has been processed. Sometimes the sale and post date are the same and sometimes the post date may be a few days later. Depending upon the business transaction procedure between the principles – the bank and the processors, processing may occur the same day, every few hours, or however they choose to arrange their system.

During a regular banking day, the sale and the post dates frequently coincide. This is not the case during the weekend. Since banks are closed on Saturday and Sunday, weekend monetary transfers do not occur until Monday when banks reopen. Even banks that offer 24 hour banking will not have the transactions actually transfer until Monday because the banking transfer system is tied into the Federal Reserve which is closed on Saturday and Sunday. In practical terms, this means that the money which was authorized from the consumer’s account on Shabbos when he made the online sale, would not be withdrawn from the purchaser’s credit card and entered into the vendor’s account until Monday morning or thereafter. The same procedure holds true for purchases made with debit cards. Purchases made using Pay Pal services are delayed even longer because it takes an extra day for processing.

As was mentioned previously, authorization means that the computer checks the purchaser’s credit card account and “sees” that there is credit available. However nothing passes from one account to another until the transaction is completed. Technically speaking, the vendor’s monetary acquisition, the kinyan kesef, happens on a weekday so there is no issur, prohibition of mekach umemkar, business sale transactions, on Shabbos.

There could be a potential problem when Yom Tov falls on a weekday because the authorization and the processing of the sale can take place on the same day. As with every transaction, the purchaser’s sale is authorized immediately. If the processor completes the transaction on the same day, or if the vendor’s bank does its own processing, the vendor’s account will be credited on Yom Tov. Therefore, one may be forbidden to keep the website open on Yom Tov, unless there is a pre-Yom Tov agreement with the processor, that batch reporting would take place after Yom Tov. One web site designer that we contacted stated, “…yes, you can certainly accept orders over the internet and place them on hold until a certain time. We have built e-commerce sites in the past where orders are placed and the credit card is verified but not charged until someone on the ‘backend’ approves this.”

In conclusion, a website would be allowed to remain open on Shabbos since payment is deferred until Monday or later. Regarding Yom Tov that falls on a weekday, it is recommended to design the website in such a way that payments would be deferred until the conclusion of the Yom Tov.

We thank our readers for their important input to help clarify this issue.

Special thanks to Shraga Feivel Mendlowitz of Diamondcard,
Chris Foss of, Chris Weir of Wachovia Bank,
Mr. Charles Seigman, and Mr. Israel Senderovic for their valuable assistance.