Islamic Standard on Excessive Profit-Making in Trade
✒ Fatwa by the Saudi Permanent Committee for Islamic Rulings
Source: Ibn Bāz – Majmūʿ al-Fatāwā wa al-Maqālāt: 19/128
There is scholarly disagreement on the precise limit of excessive profit (غَبْن / undue exploitation in pricing):
✦ Some scholars have suggested that charging one-third profit or more may be considered excessive.
✦ Others believe the threshold is less than that.
The most accurate criterion is based on ʿurf (social custom and market norms):
➤ Any profit that exceeds what is considered fair and acceptable by market traders and is seen as harmful to the buyer is regarded as excessive profit (غَبْن فاحش).
➤ This includes cases where the buyer lacks market knowledge or is exploited, and the price is significantly higher than prevailing norms.
① Fair pricing based on mutual consent and transparency.
② Avoiding deception, fraud, or exploitation.
③ Upholding community standards in business dealings.
Conclusion:
In Islam, the definition of unjust profit is tied to market custom and fairness, not a fixed percentage. Charging beyond what is socially and commercially reasonable — to the point of harm or deception — is prohibited.
✒ Fatwa by the Saudi Permanent Committee for Islamic Rulings
Source: Ibn Bāz – Majmūʿ al-Fatāwā wa al-Maqālāt: 19/128
❖ What Constitutes Excessive Profit in Islam?
There is scholarly disagreement on the precise limit of excessive profit (غَبْن / undue exploitation in pricing):
✦ Some scholars have suggested that charging one-third profit or more may be considered excessive.
✦ Others believe the threshold is less than that.
✔ Most Balanced View:
The most accurate criterion is based on ʿurf (social custom and market norms):
➤ Any profit that exceeds what is considered fair and acceptable by market traders and is seen as harmful to the buyer is regarded as excessive profit (غَبْن فاحش).
➤ This includes cases where the buyer lacks market knowledge or is exploited, and the price is significantly higher than prevailing norms.
⚠ Islamic Trade Ethics Emphasize:
① Fair pricing based on mutual consent and transparency.
② Avoiding deception, fraud, or exploitation.
③ Upholding community standards in business dealings.
Conclusion:In Islam, the definition of unjust profit is tied to market custom and fairness, not a fixed percentage. Charging beyond what is socially and commercially reasonable — to the point of harm or deception — is prohibited.
