Is It Allowed to Sell Above Market Price in Islam?

Selling an Item More Expensive Than the Market Rate

Question: What do the scholars of Islam say regarding the following matter: If a person sells an item to someone at three times the market rate without any deception, will the buyer have the right to cancel the deal once he finds out the actual price?

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

Answer: In the situation described, if the seller did not use any kind of deception while selling the item at three times the market rate, the buyer cannot cancel this deal, as it was made with mutual consent. However, if there was deception, the buyer can cancel the deal.

The scholars of Islamic law give an example of deception: For instance, a seller tells a buyer, "The price of my goods is this much," or "My goods are worth this much." Relying on the seller's words, the buyer buys the item. Later, he finds out that the seller was not telling the truth and the price of the item is actually much lower. Because of this deception by the seller, the buyer can return the item, provided that his right to return it has not ended due to some other reason stipulated by Shariah.

It is stated in Tabyīn al-Ḥaqāʾiq:

When the seller says to the buyer: "The price of my goods is this much," or says: "My goods are equal to this value," and the buyer purchases it based on this, but the reality is different, then the buyer will have the right to cancel this sale because the seller deceived him. If the seller did not say anything like that, the buyer does not have the right to cancel the sale. Some scholars have said that no matter how the sale happened, it cannot be cancelled, but the correct view is that if there was deception, the ruling to return the item will be given; otherwise, it will not.^[1]

The erudite Hanafi jurist, Mufti Muhammad Amjad ꜤAlī al-AꜤẓamī رَحْمَةُ الـلّٰـهِ عَـلَيْه states:

There are two situations if something is bought with Ghabn Fāḥish (excessive profiteering). Either the person was harmed through deception or not. If there is both Ghabn Fāḥish and deception, the item can be returned; otherwise, it cannot. Ghabn Fāḥish means a loss that is beyond the estimation of appraisers. For example, an item is bought for ten rupees, but one appraiser says its price is five, another says six, and another says seven; this is Ghabn-e-Fāḥish. However, if one valuer says its price is eight, another says nine, and another says ten, then this is Ghabn Yasīr (slight profiteering).

There are three ways of deception:

1. Sometimes the seller deceives the buyer and sells a five-rupee item for ten.

2. Sometimes the buyer deceives the seller and buys a ten-rupee item for five.

3. Sometimes a broker (the one who arranges the deal) deceives someone.

In these three cases, the person who suffered a loss due to Ghabn-e-Fāḥish can return the item. However, if a complete stranger deceived the person, the item cannot be returned.^[2]

وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم صلَّی اللہ تعالٰی علیہ واٰلہٖ وسلَّم

What is the ruling on selling gold for gold?

Question: What do the scholars of Islam say regarding the following matter: Our work involves making gold jewellery and selling it to shopkeepers. Our method is that when we sell gold, we take gold in return. For example, if we sell ten tolas of gold (as jewellery) to a shopkeeper, we take ten tolas of gold back. However, the shopkeeper gives one tola of gold on the spot and defers the remaining gold on credit. Is it permissible to make a contract like this?

The detail of this is that the shopkeeper buys jewellery from the workshop owner, and that jewellery is not 24 Karat, but the gold he gives back in exchange is 24 Karat.

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

This contract is not only impermissible but is a clear matter of ribā (usury). Doing this is forbidden (haram), and the income gained from it is ribā and haram wealth. In the blessed hadith, it is stated that when you sell gold, sell it then and there and in equal amounts. However, your matter is the opposite, as gold is being sold for gold on credit; therefore, it is a clear matter of ribā.

It is stated in the blessed Hadith:

عَنْ اَبِیْ سَعِیْدٍ الخُدْرِیِّ، قَالَ قَالَ رَسُوْلُ اللہِ صلی اللہ علیہ وسلم: اَلذَّھَبُ بِالذَّھَبِ، وَالْفِضَّۃُ بِالْفِضَّۃِ، وَالْبُرُّبِالْبُرِّ، وَالشَّعِیْرُ بِالشَّعِیْرِ، وَالتَّمْرُبِالتَّمْرِِ، وَالْمِلْحُ بِالْمِلْحِ، مَثَلاً بِمَثَلٍ، یَداً بِیَدٍ، فَمَنْ زَادَ، اَوِاسْتَزَادَ، فَقَدْ اَرْبیٰ، اَلآخِذُوَالْمُعْطِیْ فِیْہِ سَوَاءٌ

Translation: Sayyidunā Abū SaꜤīd al-Khudrī رَضِىَ اللّٰهُ عَـنْهُ narrates that the merciful Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم stated:

Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt—must be sold in equal amounts and there and then. So, whoever gave more or took more has indeed dealt in ribā. In this matter, the one who takes and the one who gives are both equal.^[3]

Mufti Amjad ꜤAlī al-AꜤẓamī رَحْمَةُ الـلّٰـهِ عَـلَيْه writes:

If silver is sold for silver or gold for gold—meaning the items on both sides are of the same type—then the condition is that both must be equal in weight and physical possession must take place then and there in the same session. This means each person must take possession of the other's item by their own action. If the people making the deal did not take possession by hand, but suppose they placed their item there after the contract and walked away with the other person’s item, this is not enough. Doing this makes the sale impermissible; in fact, it becomes ribā.^[4]

وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَمُ صلَّی اللہ تعالٰی علیہ واٰلہٖ وسلَّم

An Important Matter Regarding Online Buying and Selling:

Question: What do the scholars of Islam say regarding the following matter: While advertising items, pictures of the products are first posted on the internet. After seeing and liking them, the buying and selling take place, and then the customer pays the amount online. Sometimes, the item being sold is not in the ownership of the advertiser until the deal is made. However, after the deal is made, he buys it from someone else and sends it to the person who had already paid the money. What is the ruling on this?

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

If it is truly the case that the item is not in the seller's ownership at the time of the deal, then making such a deal is not permissible. It is stated in al-Durr al-Mukhtār: “کُلُّ مَا اَوْرَثَ خَلَلاً فِی رُکْنِ الْبَیْعِ فَھُوَ مُبْطِلٌ” meaning, "Every such thing that causes a flaw in the pillar of the sale makes the sale void."^[5]

While mentioning the conditions of a sale in Radd al-Muḥtār, Imam al-Shāmī رَحْمَةُ الـلّٰـهِ عَـلَيْه states:

کَوْنُہٗ مَوْجُوْداً مَالاً مُتَقَوِّماً مَمْلُوْکاً فِی نَفْسِہٖ،وَکَوْنُ الْمِلْکِ لِلْبَائِعِ فِیْمَا یَبِیْعُہٗ لِنَفْسِہٖ

This means: "It is necessary for the item being sold to exist, to be māl mutaqawwim,[6] to be owned in its own right, and that ownership of what is being sold belongs to the seller himself."^[7]

Mufti Amjad Ali al-AꜤẓamī رَحْمَةُ الـلّٰـهِ عَـلَيْه states in Bahār-e-Shariat: "The ruling on a void sale is that even if the buyer takes possession of the item, he will still not become its owner. That possession by the buyer will be considered a possession of trust (amānah)."^[8]

There are further concerns regarding the mentioned deal, but since the question was received via email, it is not possible to comment on the remaining matters without knowing the specific details.

وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم صلَّی اللہ تعالٰی علیہ واٰلہٖ وسلَّم

It is Not Permissible to Get a Haircut Without Fixing the Price:

Question: What do the scholars of Islam say regarding the following matter: Zayd got a haircut from a non-Muslim barber but did not fix the price beforehand. After the haircut, Zayd gave some money to the barber, and the barber took it silently. My question is, is it correct to do this?

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

Answer: It is not permissible to get a haircut without fixing the price. This is because the rule is that when you take permissible services from someone that require payment—such as getting the hair cut—and the payment is not fixed, it is not permissible. In such a case, the ujrat-e-mithl must be given, which means the standard market rate for that work. However, if the rates are already well-known or both parties are aware of the rates, then it is not necessary to fix the rate every time.

Nevertheless, in the situation mentioned, the contract was made with a non-Muslim; therefore, this action will not be called impermissible in any way, as corrupt contracts (Ꜥuqūd fāsidah) between a Muslim and a ḥarbī non-Muslim are permissible.

وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم صلَّی اللہ تعالٰی علیہ واٰلہٖ وسلَّم