Is there a Shari'ah limit that determines commercial profits, setting them at one-third or otherwise? I have heard some people limit it to one-third, citing as evidence that
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The questioner : Noble Shaykh, is there a Shari'ah limit that determines commercial profits, setting them at one-third or otherwise? I have heard that some people limit it to one-third, citing as evidence that the sale process is based on mutual consent, and they chose one-third to satisfy everyone. We ask for clarification and detail. May Allah reward you?
The Shaykh : Praise be to Allah, Lord of the worlds, and I send prayers and peace upon our Prophet Muhammad, the Seal of the Prophets, and upon his family and his Companions, and those who follow them with excellence until the Day of Judgment. The profit that a seller earns is not limited by the Shari'ah, neither in the Book of Allah, nor in the Sunnah of the Messenger of Allah (peace and blessings be upon him), nor in the consensus of the scholars. And we know of no one who has limited it. The most that can be said is that some scholars, when they mentioned the option of excessive loss (ghabn), said that an example of it is being defrauded by twenty percent, i.e., by one-fifth. But even with this, there is something in one's mind about it, for there is no evidence for the limitation to one-fifth either.
In any case, we say that there is no limit to profit, due to the generality of the saying of Allah the Exalted:[Al-Baqarah 2:275] and the generality of the saying of Allah the Exalted: [An-Nisa 4:29] So whenever the buyer is satisfied with the price and buys with it, it is permissible, even if the seller's profit in it is large. Except if the buyer is one of those who do not know the prices, and he is naive regarding values and prices, then it is not permissible for the seller to deceive him and sell to him at more than the market price, as some people who do not fear Allah and do not have mercy on creation do. If a young person, a woman, or someone ignorant of prices buys from them, they sell to him at exorbitant prices. And if someone who knows the prices and is knowledgeable about how to buy buys from them, they sell to him at a price much lower.
So we say in the answer that profit is not limited by the Shari'ah, and it is permissible for the seller to earn as much as he wishes, due to the generality of the two noble verses:[Al-Baqarah 2:275] and [An-Nisa 4:29] And because increase and decrease are subject to supply and demand. It may be that demand for this commodity is strong, so its prices rise, or it may be weak, so they fall. It is well known that a person may buy something for one hundred, then prices suddenly increase, and he sells it the next day or after a short time for two hundred or three hundred or more. Yes, if someone hoards a specific item of wealth and does not sell it except at what he desires, then the one in authority has the right to intervene in his matter and compel him to sell at a price that does not harm him and does not harm the people, whether this hoarder is one person or a group who do not deal in this item except they hoard it. Then it is obligatory for the one in authority in such a case to compel them to sell at a profit that does not harm them and does not harm others.
As for if the matter is absolute and the item is available everywhere and no one hoards it, then there is no harm in taking whatever profit he wishes, except if he is profiting from an ignorant, naive person who does not know. Then it is forbidden for him to profit from him more than what people profit from in this commodity.
The Shaykh : Praise be to Allah, Lord of the worlds, and I send prayers and peace upon our Prophet Muhammad, the Seal of the Prophets, and upon his family and his Companions, and those who follow them with excellence until the Day of Judgment. The profit that a seller earns is not limited by the Shari'ah, neither in the Book of Allah, nor in the Sunnah of the Messenger of Allah (peace and blessings be upon him), nor in the consensus of the scholars. And we know of no one who has limited it. The most that can be said is that some scholars, when they mentioned the option of excessive loss (ghabn), said that an example of it is being defrauded by twenty percent, i.e., by one-fifth. But even with this, there is something in one's mind about it, for there is no evidence for the limitation to one-fifth either.
In any case, we say that there is no limit to profit, due to the generality of the saying of Allah the Exalted:
But Allah has permitted trade
وأحل الله البيعbut only [in lawful] business by mutual consent
إلا أن تكون تجارة عن تراض منكمSo we say in the answer that profit is not limited by the Shari'ah, and it is permissible for the seller to earn as much as he wishes, due to the generality of the two noble verses:
But Allah has permitted trade
وأحل الله البيعbut only [in lawful] business by mutual consent
إلا أن تكون تجارة عن تراض منكمAs for if the matter is absolute and the item is available everywhere and no one hoards it, then there is no harm in taking whatever profit he wishes, except if he is profiting from an ignorant, naive person who does not know. Then it is forbidden for him to profit from him more than what people profit from in this commodity.