Premiums for Purchasers

Advertisements have largely become an integral part of the business activity. Companies spend huge amounts of money on advertising their commodities and products to attract more customers. However, not all the means used for this originally lawful purpose are equally permissible. Unfortunately, the heated competition between traders and companies has driven them to devise tricky and unethical methods that often involve dishonest transactions and bear serious outcomes, even on the whole business market.        

Dr. Rajab Abu Mleeh, Ph. D. in Shari`ah and a consultant at website, stated: Many people nowadays have aimed at new methods for advertising their goods and services to motivate people to buy their products and use their services. Announcing that there would be premiums for purchasers is one of these methods. Buyers, thus, seek to buy from certain traders than others on basis of the premiums offered by those traders.

In this concern, there are two types of premiums:

The first is simple premiums given as inducement to buy something else. For example, a seller may advertise that he who buys five pieces would take an extra one for free, or that he who buys something expensive like a car would take some spare parts, T.V. set or computer as a present. In this case, buying is intended in the first place, and the premium is something subsequent.

The second type is the big prizes for buying certain amounts. For instance, a merchant may advertise that he who buys goods for one hundred or one thousand dollars, for example, may win a car or a flat. Consequently, many people will seek buying such goods in order to win the prize. Here the prize is the goal and the purchasing becomes the means.

Contemporary jurists have, actually, differed in opinion regarding such premiums. Some jurists have refused them altogether, as such premiums lead to spreading the culture of consumption among people. They seek to buy for the sake of getting such prizes, whether they are small or big, and the Islamic Shari`ah forbids squandering and prodigality. Allah, the Almighty, says: ( O Children of Adam! Adorn yourselves at every place of worship, and eat and drink, but be not prodigal. Lo! He loves not the prodigals.) (Al- A`raf: 31)

Allah, the Almighty, also says: (Give the kinsman his due, and the needy, and the wayfarer, and squander not (your wealth) in wantonness. Lo! the squanderers were ever brothers of the devils, and the devil was ever an ingrate to his Lord.)  (Al-Isra’: 26-27)

Some other scholars have differentiated between the above two types of premiums, permitting the simple ones, while preventing the second type for the following reasons:

–           This transaction includes an uncertain outcome, something like aleatory contests. It also comprises a considerable degree of ignorance, as the buyer pays one hundred, one thousand, or more or less for the purpose of obtaining the advertised prize which he may or may not get. Transaction contracts in Islam are not to be aleatory or based on ignorance.

–           Merchants do, often, add the price of these big prizes to the cost of the goods for this purpose. This overburdens the purchasers who buy such goods at higher prices, hoping to get the advertised prizes. This is unfair to the buyers who do not get the said prize.

–           Such transactions result in spreading the spirit of enmity and hatred among the buyers, as he who is deprived of the prize harbors malice and envy against the one who has won it. Moreover, people will regard him maliciously, as he got much money without effort.

–           If the first type entices the consumptive tendency, and develops the spirit of prodigality and extravagance, the second type does the same with all the more reason.

          This type of prizes is a means of advertising that is provided only by big merchants, whereas small traders cannot afford offering big prizes. Consequently, the chance of competition is weakened before them. They may encounter loss, and this may lead to the big merchants’ becoming in control over the market and then monopolize it.

Dr. Mustafa Al-Zarqa, may Allah have mercy upon him, held the second opinion clarified above, and Dr. Youssef Al- Qaradawi, and others, have supported this viewpoint. This is the opinion upon which we build our fatwa in this concern.