What is the ruling on placing prizes on certain goods in order to promote sales?
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The questioner : Your Eminence, some merchants allocate a certain percentage of the money for the goods they deal in, or some specialized individuals do so. What is the ruling of the Shari'ah in this matter?
The Shaykh : An example?
The questioner : For example, if there are, let us say, ten boxes, and he places one box as an advertisement for the shop?
The Shaykh : Boxes of what?
The questioner : I mean, for any item, for the buyer.
The Shaykh : Do you mean a gift?
The questioner : Yes, like a gift.
The Shaykh : Or a prize.
The questioner : What is the purpose of that?
The Shaykh : To attract people. Well, that is permissible, provided that his selling is like the selling of other people. For example, if this carton is sold by others for ten, and he sells it for ten, but he places a prize for whoever buys, say, a hundred boxes, or buys for an amount of one thousand riyals, then there is nothing wrong with that. This is regarding the one who places the prize. As for the buyer, if he buys the item without needing it, but in the hope that he might win the prize, then that is forbidden, because it is a waste of money. I have heard that some people buy cartons of milk when they do not want them; they buy them and pour them out, but only in the hope that they might get the prize. This is not permissible, because it is a waste of money, and the Prophet (peace and blessings be upon him) forbade the wasting of money.
So the matter now has two perspectives:
The first perspective is for the one who places the prize, and the second perspective is for the buyer.
So regarding the one who places the prize, we say: if he does not add anything extra to his goods for the sake of the prize, meaning people sell for ten and he sells for ten, then he owes nothing.
As for the buyer, we say: are you buying because you need this item? Yes, and you say: since I need it, it is more pleasing to me to buy from this man who has a prize, in the hope that it might be mine, than to buy from a person who has no prize or does not have a prize. This is permissible.
But if he buys and has no need for it, but only in the hope that he might get the prize, then that is forbidden, because it falls under the category of wasting money, and because he might buy many things and not get the prize, in which case he would be taking a risk and gambling.
It remains to be said regarding the first issue: if the one who places the prize sells as other people sell, does this not fall under the category of cutting off the livelihood of others, because people might flock to him and leave the other people?
We say: this is true, that it may have an effect. So if the one in authority, or whoever acts on his behalf, such as the municipality that oversees the people's markets, sees that such a thing should be prohibited, then he has the right to do so. This would be in the category of regulation and preserving the markets from manipulation, because a person might come and say: this one placed a prize of a car, for example a Jetta, so I will place a prize of a Cadillac so that people will flock to me more. This would cause disorder and manipulation in the markets. So if the one in authority, or whoever acts on his behalf, sees that such a thing should be prohibited, then he has the right to do so. Yes, one question? No, no.
The questioner : The same question, knowing that most shops find that they deal with commissions and giving a percentage to the worker, such that he is not informed of the matter.
The Shaykh : This is a second question, O Shaykh. May Allah guide you.
The questioner : It is the same, it is the same.
The Shaykh : No, it is the same, but in any case, shall we answer it or leave it? This, yes.
The questioner : We leave it.
The Shaykh : Fine.
The questioner : Shaykh, may Allah reward you for it.
The Shaykh : Another person is asking, yes?
The Shaykh : An example?
The questioner : For example, if there are, let us say, ten boxes, and he places one box as an advertisement for the shop?
The Shaykh : Boxes of what?
The questioner : I mean, for any item, for the buyer.
The Shaykh : Do you mean a gift?
The questioner : Yes, like a gift.
The Shaykh : Or a prize.
The questioner : What is the purpose of that?
The Shaykh : To attract people. Well, that is permissible, provided that his selling is like the selling of other people. For example, if this carton is sold by others for ten, and he sells it for ten, but he places a prize for whoever buys, say, a hundred boxes, or buys for an amount of one thousand riyals, then there is nothing wrong with that. This is regarding the one who places the prize. As for the buyer, if he buys the item without needing it, but in the hope that he might win the prize, then that is forbidden, because it is a waste of money. I have heard that some people buy cartons of milk when they do not want them; they buy them and pour them out, but only in the hope that they might get the prize. This is not permissible, because it is a waste of money, and the Prophet (peace and blessings be upon him) forbade the wasting of money.
So the matter now has two perspectives:
The first perspective is for the one who places the prize, and the second perspective is for the buyer.
So regarding the one who places the prize, we say: if he does not add anything extra to his goods for the sake of the prize, meaning people sell for ten and he sells for ten, then he owes nothing.
As for the buyer, we say: are you buying because you need this item? Yes, and you say: since I need it, it is more pleasing to me to buy from this man who has a prize, in the hope that it might be mine, than to buy from a person who has no prize or does not have a prize. This is permissible.
But if he buys and has no need for it, but only in the hope that he might get the prize, then that is forbidden, because it falls under the category of wasting money, and because he might buy many things and not get the prize, in which case he would be taking a risk and gambling.
It remains to be said regarding the first issue: if the one who places the prize sells as other people sell, does this not fall under the category of cutting off the livelihood of others, because people might flock to him and leave the other people?
We say: this is true, that it may have an effect. So if the one in authority, or whoever acts on his behalf, such as the municipality that oversees the people's markets, sees that such a thing should be prohibited, then he has the right to do so. This would be in the category of regulation and preserving the markets from manipulation, because a person might come and say: this one placed a prize of a car, for example a Jetta, so I will place a prize of a Cadillac so that people will flock to me more. This would cause disorder and manipulation in the markets. So if the one in authority, or whoever acts on his behalf, sees that such a thing should be prohibited, then he has the right to do so. Yes, one question? No, no.
The questioner : The same question, knowing that most shops find that they deal with commissions and giving a percentage to the worker, such that he is not informed of the matter.
The Shaykh : This is a second question, O Shaykh. May Allah guide you.
The questioner : It is the same, it is the same.
The Shaykh : No, it is the same, but in any case, shall we answer it or leave it? This, yes.
The questioner : We leave it.
The Shaykh : Fine.
The questioner : Shaykh, may Allah reward you for it.
The Shaykh : Another person is asking, yes?