Continuation of the discussion on installment sales.
Machine translationRead the Arabic original
The Shaykh : Leave the big merchants alone, and let us talk about merchants who are not, I do not say small, but merchants like the one in your story who do not have massive liquidity. Now, if a man comes to you and says, "I want to buy this refrigerator, but I can only pay you ten dinars, or fifty, or a hundred each month," which is
The questioner : Yes.
The Shaykh : Do you sell it to him at the cash price, or do you add an increase to it?
The questioner : No, there is no increase.
The Shaykh : There is no increase, good. Allow me to address your topic now. If we set aside the image of the Kuwaiti merchant, okay?
The questioner : Yes.
The Shaykh : We have set that aspect aside. Your topic now falls under another branch of jurisprudence: Is the profit of a merchant in any goods he buys to trade in and profit from fixed by the Shari'ah, or is it not fixed? The answer is that it is not fixed.
So, if you now want to determine the profit price that suits you for the goods you are selling, there is no doubt that you know the trade better than I do. The capital of this refrigerator, for example, as I said, is 500 dinars. Your profit on it will be more than if you sold a radio whose capital is, for example, 100. So, you determine the profit that suits you without putting the two prices and the two sales in your mind.
The questioner : I do not do that.
The Shaykh : That is not on me, but what will happen to you here? This radio is with you, and it is also with that merchant who is richer than you. I am not saying now that he is bigger than you, because we want to avoid being told that you are smaller than him, okay?
The questioner : Yes.
The Shaykh : So, the point is this: when you sell this radio for one hundred and ten, and that merchant who is richer than you sells it for one hundred and fifty, it means your trade will decline.
The questioner : Yes, exactly.
The Shaykh : Because, as I say to my brothers, returning to cash and installment sales: if we assume two merchants selling the same goods, one sells at one price, but not in the Kuwaiti way—keep that in mind—and the second sells at two prices: the cash price and the installment price. The first merchant sells at the cash price, and the second sells at the cash price plus the installment price at the same rate. Which one will succeed in trade?
The questioner : Naturally, the one who remains steadfast and is sincere in trade.
The Shaykh : No, no debts.
The questioner : Ah
The Shaykh : I am giving you an example of two men.
The questioner : Ah, the one with the lower price.
The Shaykh : That is the answer, and the best speech is what is little and sufficient.
The questioner : In our country, one thing is happening.
The Shaykh : Please, be patient. I will get to you now. If we imagine two merchants, each selling one type of goods, but one sells at the cash price as the installment price, and the second sells at two prices, with the installment price higher than the cash price. If both merchants have the same cash price, but the second adds to the first by selling at an increase in installments, while the first does not increase, which one has the more successful trade? The first. As for whether he is sincere or not, that is a given. Now, your capital is less than his, and his capital is more. When he sells this radio on the basis of making a ten percent profit, and you make a ten percent profit, it means your trade will lag behind. Therefore, in reality, to compete with the merchant who is richer than you—and peace and mercy of Allah be upon you—you must be content with a small profit. Then the situation will reverse, and you will become more profitable than him. How? He makes more profit per unit than you, but the profit he gets is, for example, if he sells five units a day, you will sell ten, because people, by nature, when your name becomes known among them as one who is content with a small profit, the customers will come to you. This goods is like that goods, but here the price is lower. Therefore, your commercial logic—and please pay attention to what I am saying—is wrong, not the Shari'ah logic, because I told you the Shari'ah does not fix the profit. But you are now forced to lower the profit so that more customers come to you, and so that this merchant with his large capital does not outdo you by drawing the customers to him. So, reverse the situation, and you will find that the customers are with you. And thus,[At-Talaq 65:2-3] If you and any Muslim adhere to the Shari'ah of Allah first, and then to mercy toward the servants of Allah second, this will be more profitable for you in this world and the Hereafter. This is my advice to you.
The questioner : May Allah reward you.
The Shaykh : And may He bless you.
The questioner : May Allah reward you with good.
The Shaykh : And you, if Allah wills.
Please go ahead.
The questioner : Yes.
The Shaykh : Do you sell it to him at the cash price, or do you add an increase to it?
The questioner : No, there is no increase.
The Shaykh : There is no increase, good. Allow me to address your topic now. If we set aside the image of the Kuwaiti merchant, okay?
The questioner : Yes.
The Shaykh : We have set that aspect aside. Your topic now falls under another branch of jurisprudence: Is the profit of a merchant in any goods he buys to trade in and profit from fixed by the Shari'ah, or is it not fixed? The answer is that it is not fixed.
So, if you now want to determine the profit price that suits you for the goods you are selling, there is no doubt that you know the trade better than I do. The capital of this refrigerator, for example, as I said, is 500 dinars. Your profit on it will be more than if you sold a radio whose capital is, for example, 100. So, you determine the profit that suits you without putting the two prices and the two sales in your mind.
The questioner : I do not do that.
The Shaykh : That is not on me, but what will happen to you here? This radio is with you, and it is also with that merchant who is richer than you. I am not saying now that he is bigger than you, because we want to avoid being told that you are smaller than him, okay?
The questioner : Yes.
The Shaykh : So, the point is this: when you sell this radio for one hundred and ten, and that merchant who is richer than you sells it for one hundred and fifty, it means your trade will decline.
The questioner : Yes, exactly.
The Shaykh : Because, as I say to my brothers, returning to cash and installment sales: if we assume two merchants selling the same goods, one sells at one price, but not in the Kuwaiti way—keep that in mind—and the second sells at two prices: the cash price and the installment price. The first merchant sells at the cash price, and the second sells at the cash price plus the installment price at the same rate. Which one will succeed in trade?
The questioner : Naturally, the one who remains steadfast and is sincere in trade.
The Shaykh : No, no debts.
The questioner : Ah
The Shaykh : I am giving you an example of two men.
The questioner : Ah, the one with the lower price.
The Shaykh : That is the answer, and the best speech is what is little and sufficient.
The questioner : In our country, one thing is happening.
The Shaykh : Please, be patient. I will get to you now. If we imagine two merchants, each selling one type of goods, but one sells at the cash price as the installment price, and the second sells at two prices, with the installment price higher than the cash price. If both merchants have the same cash price, but the second adds to the first by selling at an increase in installments, while the first does not increase, which one has the more successful trade? The first. As for whether he is sincere or not, that is a given. Now, your capital is less than his, and his capital is more. When he sells this radio on the basis of making a ten percent profit, and you make a ten percent profit, it means your trade will lag behind. Therefore, in reality, to compete with the merchant who is richer than you—and peace and mercy of Allah be upon you—you must be content with a small profit. Then the situation will reverse, and you will become more profitable than him. How? He makes more profit per unit than you, but the profit he gets is, for example, if he sells five units a day, you will sell ten, because people, by nature, when your name becomes known among them as one who is content with a small profit, the customers will come to you. This goods is like that goods, but here the price is lower. Therefore, your commercial logic—and please pay attention to what I am saying—is wrong, not the Shari'ah logic, because I told you the Shari'ah does not fix the profit. But you are now forced to lower the profit so that more customers come to you, and so that this merchant with his large capital does not outdo you by drawing the customers to him. So, reverse the situation, and you will find that the customers are with you. And thus,
And whoever fears Allah - He will make for him a way out (3) And will provide for him from where he does not expect.
ومن يتق الله يجعل له مخرجا ويرزقه من حيث لا يحتسبThe questioner : May Allah reward you.
The Shaykh : And may He bless you.
The questioner : May Allah reward you with good.
The Shaykh : And you, if Allah wills.
Please go ahead.
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.