Chain pyramidal commission: Is It Permissible?
This refers to a fatwa given by Mufti Dr. Monzer Kahf on 23rd April 2002 under the title “Giving Commission to Business Solicitors”, for a question in connection with network marketing. Both the question and the fatwa appear to be vague and ambig uous. I would like to have a clear answer. At the outset, the person who asked the question did not disclose the value of the product and its real market value. What I understand is that the product, Gold Quest International’s Numismatic Gold Coins, is higher priced than its actual market value. Since the company offers charismatic returns, the solicitors normally do not care about the value of the product in anticipation of the potential benefit in the future. Since the actual product on sale is not the product but the charisma of the anticipatory returns for each individual who joins the chain, I feel that there is a violation of fundamental norms of Shari`ah for business.Secondly, it is quite clear that one who buys the product would not at all be doing it for its use but for engaging in the business with anticipation that he would get someone to join him, thus registering his returns. It is common knowledge that many people who join in this chain would lose their money due to the simple fact that all the solicitors would not be able to book 10 people to ensure their returns. If the product with them is worth the money they spent, there would be no loss for them. The commission received by the upper link-man would definitely involve the part of the loss that is sustained by the lower links. Is it permissible in Shari`ah?Thirdly, it is a business that exploits friendship. A person who is not familiar in the business would not have the confidence and credibility to approach a stranger to join him; instead, he would depend on his friendship to implant the seed of his business. Since the product is not an essential consumer item, the exploitation of friendship would be considered unacceptable to Shari`ah. I would appreciate receiving a further clarification on this subject. Notes1. I think the network marketing people misuse your fatwa.2. I believe Allah will question us if we buy unnecessary products.3. And Allah will also question us for convincing others to buy this unnecessary product.4. According to the Islamic Shari`ah, a businessman should have risk of profit as well as loss.
