Imam al-Shafi'i (may Allah have mercy on him) said: A shaykh from the people of Makkah told me: I heard Tawus (may Allah have mercy on him), while I was standing by him, as he was asked about selling zakah before it has been received. Tawus (may Allah have mercy on him) said: By the Lord of this House! It is not permissible to sell it before it is received, nor after it is received.
Imam al-Shafi'i (may Allah have mercy on him) said: This is because the Messenger of Allah (peace and blessings be upon him) said: "It is to be taken from the rich and given to the needy." The needy and the poor are to be given the thing itself, not its price.
The Shaykh said: The reports that have come concerning the obligatory zakah are evidence in this matter.
Hadith Referenceالسنن الكبرى للبيهقي / كتاب الزكاة / 7628