Is it permissible for a merchant to sell his goods for less than the cost price?

The questioner : What happens with us is that some merchants need liquidity or to settle either a bill of exchange or a complaint.

The Shaykh : May Allah keep them safe.

The questioner : So here, the transaction is that he tries to sell the goods for less than his cost price. What is the ruling on this?

The Shaykh : Yes, this ruling is permissible and this ruling is not permissible. How is that? It is permissible if I find it in my interest to dispose of this goods for more than its capital. No one can say anything to me. If I wanted to dispose of the goods I have for free, no one could say anything to me. If I wanted to sell it for half its value, no one could say anything to me, and so on. So this is permissible.

The questioner : But it harms us.

The Shaykh : Be patient. This harm is a separate discussion. You are objecting to my words, whereas you should have raised this issue at the beginning, not now.

The Shaykh : The audience : They laugh.

The questioner : Because this is what I wanted to happen, and this is what happened to me.

The Shaykh : No problem. What happened is that, may Allah reward you, you should have reminded me beforehand so that I could answer you with a comprehensive answer regarding the issue. But when you feel that I am going to give you an answer that does not suit you commercially, you say, "This will harm us." Why didn't you say this before, my brother? So that I would know your answer. Now I am going to develop the topic because of the word you introduced into the topic, but I will not develop the topic in a way that loses the first topic.

The questioner : I don't hear.

The Shaykh : Okay. So I am saying, let Zayd be a person who sells. Your question was as follows: In some circumstances, he sells the goods for less than their capital because he has bills of exchange he needs to pay. I said it is permissible and not permissible. Abu Faris, look at this, it has a meaning. Do you see how it is permissible and not permissible? I was in the process of explaining when it is permissible and when it is not permissible, and you came in and entered the topic, saying, "It will harm us." Well, wait for me a little. If I show you why it is permissible, because if he distributed this goods for free, no one could say to him, "Why did you do this?" You might think it is a loss, but this loss is not in your interest. If you had been patient with me, if you had given it in charity, if you had waived half its price, if you had waived, if, if, and so on, for a little less than the capital, no one could say to him that he did wrong, because he is free to dispose of his wealth in a lawful manner as he wishes. Now, the greatest of these is that he uses your word "harm" to distribute the goods like this for free, then sell it for half its price. This is also another degree. The last degree is that he sells it for five dinars less than the capital. He is free; no one can say, "No, do not do this." This is the meaning of my saying it is permissible. As for my saying it is not permissible, it is because he is lowering the price due to his dealing with riba, due to his dealing with banks, due to his neck being bound by the shackles of the banks, by what? By the bills of exchange that you named. And therefore, he did not put himself in this reduction that you pointed out as being harmful to you, the merchants with less capital, except because of his dealing with riba. So in this regard, it is not permissible. Have I made it clear to you what the meaning of permissible is and what the meaning of not permissible is?

The questioner: May Allah bless you.

The Shaykh : So, neither the large merchants nor the small merchants, all of these and those, it is not permissible for them to deal with banks. And Allah is sufficient for the believers in fighting.

The questioner : May Allah reward you with good, our Shaykh.