Several companies grant gifts to its customers, as a part of its sales promotion program. These gifts can be granted to all of the company’s customers or to only a few of them selected on any bases, decided by the company. Sheikh Ahmad Kutty, a senior lecturer and an Islamic scholar at the Islamic Institute of Toronto, Ontario, Canada, states the following: There is nothing wrong about buying one item and then getting another one as free, so long as the same is granted to every customer who buys the same product. In this case, nobody is deprived of the price so long as the offer didn’t expire. Therefore, there is no element of Gharar in it. Sellers are free to provide incentives and prizes to promote sales.
Dealing with the issue of sale prizes in much more detail, the late Sheikh Mustafa Ahmad Az-Zarqa, professor of Jurisprudence at the Syrian Universities, states:
My opinion concerning this issue is to differentiate between two kinds of prizes: simple gifts as it is a customary practice of traders to give to the customers who buy a great amount of goods some gifts such as children toys or an extra piece of the commodity they have bought as a sign of thankfulness and encouragement. The second type of gifts is to give expensive prizes such as a car, refrigerator, etc. which is won by only one of the coupon holders among the customers after a selection done in a random drawing as in the case of lottery.
As for the first kind, simple gifts which traders are used to give to those who make big shopping and buy several products are Halal for this is a token of showing gratitude to the customer. As for the second type, which undergoes a selection in a random drawing it is no more than commercial lottery which is seen by the Muslim scholars as a kind of gambling and hence it is Haram and causes both the trader and customer to incur sin. The prize accrued during the above method is not Halal.
In addition, this method exposes minor traders to great loss, for it will keep customers away from dealing with them because they do not have such attractive methods of gambling.
Commenting on this the eminent Muslim scholar, Sheikh Yusuf Al-Qaradawi states: I support this profound juristic explanation. Moreover, this method is in the end a way to raise the price of commodities at the cost of the customers. It is the result of the Western way of inciting people to the excessive consumption of goods even if they have no need to them which goes against the Islamic way that encourages moderation in all things.
Elaborating on the socio-economic effects of such methods, we’d cite the following: The target of most of the sales promotion campaigns adopted in the capitalistic societies is not to efficiently and effectively cater for the existing demand or to create a real demand for a product or service, but to enflame artificial demand for that product or service. “Lucky Draws” and other related techniques (such as advertising etc.) deserve to be analysed on the basis of their socio-economic effects particularly from a moral perspective. However, it is clear that even though the effects of such sales promotion campaigns may not be desirable from a socio-economic perspective, yet in a competitive environment, an individual company may not be in the best of positions to avoid opting for such marketing gimmicks.
If the legislators in a state feel that the socio-economic effects of such sales promotion techniques are not desirable, then they should pass legislations to safeguard the society from these effects. Till such time, those companies, who have the ability to survive and prosper in the market without resorting to such sales promotion techniques which create artificial demand for their products, should consider it binding upon themselves, from a socio-moral perspective, to avoid resorting to such practices.