I have goods the sellingprice per item is R6-00

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Question

I have goods the sellingprice per item is R6-00 i give this goods to shopkeepers to sell, they resell the goods at R10-00 per item.after three months they pay me R6-00 and they keep the difference of R4-00. is this permissible? if not please give a solution on how to conduct such a transaction.

(2) i have goods the sellingprice per item is R6-00, i give these goods to a shopkeeper and instruct him to sell it at R10-00 with this understanding that i will keep R6-00 and the shopkeeper keeps the R4-00 profit  when he sells the goods is it permissible?

Answer

Muhtaram / Muhtaramah

In the Name of Allāh, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāh wa-barakātuh.

The transaction can be carried out in two ways:

  1. You sell the product to the shopkeeper on credit for R6.00.  The shopkeeper will now be the owner of the product.  He is independent to sell the product further at what ever price he wishes to.  It is permissible for the shopkeeper to sell the product at R10.00 and make a profit of R4.00.  He will have to pay you R6.00 for each product on the date agreed upon as per the original transaction that took place between you two.

  1. You hire the shopkeeper to sell the product on your behalf.  He will be your agent.  You stipulate the price of the product to be sold at R10.00 and the agents fees will be R4.00.  In this manner, you will receive R6.00 for each product sold and the shopkeeper will receive R4.00 for his labor.

The difference between the two transactions is that in the first case, the shopkeeper is buying the product and becoming the owner.  In doing so, the item comes into his ownership and his responsibility.  The product was to be stolen or damaged in the future, it would be his financial loss and will not affect you.  He will still be liable to pay you.

In the second case, the shopkeeper is only an agent.  The item is still in your ownership and the item is only in his trust.  If it were to be stolen or damaged, you will have to bear the financial loss and he will not be held responsible for it, on the condition it was not due to his negligence or dishonesty.

And Allah knows best
Darul Iftaa

Madrasah Inaa’miyyah

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