There is this story about Bilal... He returned once with dates...and the Prophet asked him where he got the dates. Bilal said he exchanged 2 spoiled dates for one edible one. The prophet said that this was usury (riba)...How is this so? If it is usury, is a spoiled date equivalent in value to a non-spoiled one?
Thank you

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.

The story which you mentioned is not narrated by Bilal . However, Abu Saeed Al-Khudhri and Abu Hurayrah,  narrated that the Prophet appointed someone as a governor of Khaybar. That governor brought to him an excellent kind of dates (from khaybar). The Prophet asked, ''Are all the dates of Khaybar like this?'' He replied, “I swear by Allaah, no, O Prophet of Allaah! But we barter one Saa' (which equals 4 Mudds, i.e.  1,240 grams) of this (type of dates) for two Saa's of our dates, and two Saa's of it for three of ours”. Then, the Prophet said: ''Do not do so (as that is a kind of usury) but sell the mixed dates (of inferior quality) for money, and then buy good dates with that money”.

The dates of bad quality can not equal good-quality dates. Hence, in order to avoid Riba (interest and/or usury) -because dates are among the kinds of products which cannot be exchanged for inferior or superior weight or amount [or number] of other products –the Prophet   advised people to sell the usurious kind of dates (i.e. the bad quality dates) and then buy the good quality dates with that money.

It is confirmed that the Prophet said: "It is not correct to buy one Dirham with two Dirhams, or one Dinar (silver currency) with two Dinars, or one Saa' with two Saa's".

In another narration, the Prophet said: "I fear usury from you.'' A person stood and asked: “O Prophet, what do you say about a person who sells a horse against some horses or a good camel against a camel not so good? He said: “There is nothing wrong about this, as long as it is done hand to hand".

In these categories selling one kind by a superior or inferior number of the same kind is permissible, but the deal should be done hand to hand.    

Allaah Knows best.