17Jul

Islam and Online Sales (ecommerce)

This is an interesting issue. Over the years I have asked various scholars and received fairly mediocre answers. Personally with the Autostyle online store, it was started with the correct intentions. Sure one of it was to improve turnover but also to provide a service to our customers with:
1) online catalogue,
2) easier & quicker way to order,
3) safe online enviroment to purchase,
4) door to door delivery,
5) servicing customers who cant drive to our store.
However, in Islam one cannot sell a commodity without owning it. For you to sell a tyre, you must own the tyre and then sell it to whoever. I suppose using this logic the world economy would be in a better place right now.

Now when selling online, we do not always have an item in stock or even carry it in stock. Out of over 7000 items on system, there are a few hundred that are either sold out or on special order. Many a time it is not financially viable to stock a R30 000 alloy wheel that you might only sell once a year and customers fully understand this and do not mind waiting a specific time period for the item.

Below is a ruling from SunniPath: (original link)

Question:
I’m thinking of starting an online PC shop. Consumers would see PC’s on my website and if they buy any, they pay for it straight away. However I would only buy the relevant parts after I have received payment from the consumer. The reason for this is that consumers can customize the PC’s so the parts may vary and I do not have the funds to keep that much stock. Can you tell me if it is permissible for me to trade like this?

Answer:
In the name of Allah, Most Compassionate, Most Merciful,

The general principle of Shariah is that it is not permitted to sell a commodity that is not in one’s ownership. It is one of the basic requirements for a valid sale that the commodity or item being sold is in the ownership and possession of the seller. Hence, if the seller does not own a particular item, it will not be permitted for him/her to sell it to someone else.

Hakim ibn Hizam (Allah be pleased with him) reports that he said to the Messenger of Allah (Allah bless him and give him peace): O Messenger of Allah! At times an individual comes to me to purchase a specific item that I do not possess. Can I sell him the item and then purchase it from the market? The Messenger of Allah (Allah bless him & give him peace) said: Do not sell what you don’t own.(Sunan Tirmidhi, no: 1232 and others)

However, there is an exception to this general rule, namely the sale of what is known as Salam. Salam is a special type of sale wherein the seller undertakes to supply the commodity or goods to the buyer at a future date in exchange of payment fully paid at spot. (See: al-Fatawa al-Hindiyya, 3/178)

The fact that Salam was an exception to the general rule, it was subjected by the Messenger of Allah (Allah bless him and give him peace) to certain strict conditions. The jurists (fuqaha) have explained these conditions in great length and detail in their respected works. It is not possible to explain these conditions here in detail, but the following is a very brief summary of these conditions:

1) The buyer must pay the price in full at the time of effecting the sale. If the buyer defers all or some part of the price to a later date, the sale would be invalid, for this would constitute exchanging a debt against a debt which has been prohibited by the Messenger of Allah (Allah bless him and give him peace).

2) Salam is only permitted in commodities and items whose quality and quantity can be specified exactly. Precious stones and similar items cannot be sold on the basis of a Salam contract, for every stone is normally different from the other in quality, size or weight.

3) The commodity or item being sold on the basis of Salam must be specified and described clearly. All the various relevant details and descriptions must be clearly mentioned leaving no room for ambiguity.

4) The exact date of delivering the commodity must be specified in the contract. (The Hanafi fuqaha, contrary to the fuqaha of the other three schools, have made a minimum of one month between the contract and delivery a condition for the validity of this sale. However, many contemporary Hanafi jurists have overlooked this condition due to the needs of the time; hence both parties may fix any date for delivery with mutual consent).

5) Salam is not permitted in items that must be exchanged at spot, such as exchanging gold in return of silver.

6) The item or commodity must remain in the market right from the date of contract to the date of delivery. Hence, if the item being sold is not available in the market at the time of contracting the sale, it will not be allowed.

7) The contract of Salam cannot be carried out on particular commodities, such as the fruit of a particular tree, etc, as it could be destroyed before delivery. Thus, it will not be allowed to effect Salam in commodities the supply of which is not certain. (See: al-Fatawa al-Hindiyya, 3/ 179-181)

In light of the above details, it would be permitted for you to sell PC’s with the consumer paying at spot and you delivering the commodity at a later date, provided all the conditions mentioned above are fully met.

The consumer must pay the payment in full and not defer any amount. Similarly, all the necessary details of the commodity must be clearly outlined and specified, the date of delivery must be determined, and other such conditions must be met. By doing so, your trade in selling PC’s in the manner explained by you will be halal(lawful), Insha Allah.

And Allah knows best

Muhammad ibn Adam al-Kawthari
Darul Iftaa, Leicester, UK

To summarise, not only Islamic but good online business practice should have the following:
1) delivery time frame (eg 2 to 4 working days) and notification if there are any delays
2)clear and concise description of the product as well as a good resolution photograph or graphic and open lines of communication should a customer need clarification.
3) payment must be made in full for us to being an order process.
4) items are fixed in shape and size. Not like Gold or silver.

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2 comments

  1. Asalaamu alaikum. This is a topic which our community is sorely in need of training on. Shukran for sharing this information, definitely the first time I’ve heard of this type of transaction.

    Jazzak Allahu khairan

  2. assalamu aleykum wa rahmat Allah,

    A very commendable article indeed.
    Learnt much, and was comforted in my own business.

    Barak Allahu Feeka.

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