Cash vs. Credit Price Difference and the Shar‘i Status of Prize Bonds
Source: Aḥkām wa Masā’il, Section: Issues of Buying and Selling, Vol. 1, p. 371
In our area of Mailsi, a constant debate has arisen:
Is it permissible or impermissible for the cash price of an item to differ from its credit price (increase or decrease)?
This matter has become a repeated subject of discussion, yet no final conclusion has been reached. To resolve it, we have sought the guidance of various scholars.
We request you to clarify this issue in the light of Qur’an and Sunnah:
Additionally, in the Ahl al-Ḥadīth newspaper of 4 November, an article by ‘Abd al-Raḥmān Chīmah was published. Kindly consider this as well.
On 13 November 1994, I met Muftī ‘Abd al-Raḥmān and asked him about this issue. He gave a clear fatwā of permissibility.
His reasoning was:
Meaning:
If the seller says, “This is the cash price, and this is the credit price,” and the buyer agrees to one of them, then there is no problem, because the deal was concluded on one price.
However, if the seller simply says, “This is the cash price, and this is the credit price,” and the buyer takes the goods without finalizing which price applies, then this constitutes a case of two prices in one transaction, which is impermissible.
Another related matter is that of prize bonds, which work as follows:
Thus, the purchaser:
◈ Does not suffer any financial loss.
◈ Is not promised any fixed profit rate, unlike the system of interest in banks.
Al-ḥamdu lillāh, waṣ-ṣalātu was-salāmu ‘alā Rasūlillāh, ammā ba‘d!
If the cash price is lower and the credit price is higher, then such a sale is impermissible.
For further details, see:
This type of business is also impermissible in Sharī‘ah.
ھذا ما عندي والله أعلم بالصواب
Source: Aḥkām wa Masā’il, Section: Issues of Buying and Selling, Vol. 1, p. 371
❖ Background of the Question:
In our area of Mailsi, a constant debate has arisen:
Is it permissible or impermissible for the cash price of an item to differ from its credit price (increase or decrease)?
This matter has become a repeated subject of discussion, yet no final conclusion has been reached. To resolve it, we have sought the guidance of various scholars.
We request you to clarify this issue in the light of Qur’an and Sunnah:
- Is it permissible for one item to have one price for cash payment and another price for credit payment?
Additionally, in the Ahl al-Ḥadīth newspaper of 4 November, an article by ‘Abd al-Raḥmān Chīmah was published. Kindly consider this as well.
❖ The Opinion of Muftī ‘Abd al-Raḥmān:
On 13 November 1994, I met Muftī ‘Abd al-Raḥmān and asked him about this issue. He gave a clear fatwā of permissibility.
His reasoning was:
- If both the cash and credit prices are made clear to the buyer,
- And after clarification, the transaction is finalized on one of the two prices,
- Then this counts as a single transaction, not two.
Meaning:
If the seller says, “This is the cash price, and this is the credit price,” and the buyer agrees to one of them, then there is no problem, because the deal was concluded on one price.
However, if the seller simply says, “This is the cash price, and this is the credit price,” and the buyer takes the goods without finalizing which price applies, then this constitutes a case of two prices in one transaction, which is impermissible.
❖ The Issue of Prize Bonds:
Another related matter is that of prize bonds, which work as follows:
- A person purchases prize bonds worth 10,000 rupees.
- Prizes are awarded by lottery draw.
- The purchaser can return the bonds at any time for their full price.
- They can also be exchanged at banks for their equivalent cash value.
Thus, the purchaser:
◈ Does not suffer any financial loss.
◈ Is not promised any fixed profit rate, unlike the system of interest in banks.
❖ Answer:
Al-ḥamdu lillāh, waṣ-ṣalātu was-salāmu ‘alā Rasūlillāh, ammā ba‘d!
➊ Regarding Cash vs. Credit Price Difference:
If the cash price is lower and the credit price is higher, then such a sale is impermissible.
For further details, see:
- The discussion between Mawlānā Abū al-Barakāt Aḥmad (رحمه الله) and Ḥāfiẓ ‘Abd al-Salām Bhattvī (ḥafiẓahullāh).
- The article of Mawlānā Abū Jābir Dāmanwī (ḥafiẓahullāh).
- Shaykh al-Albānī (ḥafiẓahullāh) in Irwā’ al-Ghalīl under this topic.
➋ Regarding Prize Bonds:
This type of business is also impermissible in Sharī‘ah.
ھذا ما عندي والله أعلم بالصواب
