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Search Fatawaa

Subject : Ruling on Discount Cards and Promo Coupons

Fatwa Number : 3160

Date : 13-01-2016

Classified : Current Financial Issues

Fatwa Type : Search Fatawaa

Question :

What is the ruling on issuing discount cards and promo coupons?

The Answer :

All perfect praise be to Allah, The Lord of The Worlds; and may His blessings and peace be upon our Prophet Mohammad and upon all his family and companions.

Discount cards and promo coupons issued by marketing and advertising companies, tourism and travel agencies, or malls, whereby the holder is granted a certain discount when purchasing commodities or services from a number of companies, are divided into two types: First: Cards given against a cash sum by means of annual prescription. Second: Free cards which are given to the customer as an incentive, and could be given for free once his purchases reach a certain limit. Cards given against a cash sum are forbidden, because they violate Sharia in several ways: Ignorance and uncertainty for such a transaction is based on risk and is open to loss and profit.These cards are a means of deceiving and squeezing money out of customers.

Moreover, they lead to dispute because the issuing party can`t compel the malls, centers and companies to offer the customer the agreed upon discounts. Resolution No.(138),(3/2010) by the Board of Iftaa`, Research and Islamic Studies, " Ruling of Sharia on Discount Cards Offered by Malls as Incentive to Purchasers ," reads as follows: There are different situations as far as these cards are concerned:

1-If they are given by the mall or the company to the customer for free in order for him to take part in prize drawing or to receive some discounts, then they are permissible. This way, they are tantamount to a promise made to the customer to cut down prices or grant him prizes. A promise to grant a benefit is permissible provided that the mall or company doesn`t employ this as a trick to increase the prices of the products.

2-If they are paid for by the customer against an amount which is greater than the cost of processing and issuing them, or they are processed against paying an annual subscription, then this type of cards is definitely forbidden because it involves gambling. This way, the mall makes a profit out of selling them; whereas, the customer enters a gambling process, where he may win the discounts and the prizes, or nothing; because he didn`t have the needed number of points to be qualified for receiving the benefits of these cards, or because he didn`t purchase from that particular mall. The probability which relies on chance is the forbidden gambling, which is Gharar(risk and uncertainty) that Islamic Sharia has forbidden in commutative contracts.

3-If the cards are bought by the customer against a certain amount which is only intended to cover the cost of processing and issuing them, without the mall making any profit, then this is open for suspicion and requires further examination. To be on the safe side, a Muslim should avoid such suspicious matters.

The above is the view adopted by the Islamic Fiqh Assembly of the Muslim World League No.(103)(2/18) and it reads: First: It isn`t permissible to issue or purchase the aforementioned discount cards against a fixed price or an annual subscription, because they involve Gharar; the purchaser pays money and doesn`t know what he will get in return i.e. definite loss against potential benefit. It was narrated that Abu Hurairah said: "The Messenger of Allah forbade Gharar transaction and Hasah transactions."{Sahih Muslim}. Second: If these cards are issued for free, then their issuance and acceptance are permissible, because they are tantamount to a donation or a grant. And Allah knows best.



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