Islamic Law of Taking Profit

One of the characters possessed by Islam as a religion is syumul. The meaning of this term, which is certainly derived from Arabic, is that Islam becomes a way of life which provides the guidance to do all of our activities since waking up till sleeping, since morning till the new morning comes. This guidance is always relevant to humans’ lives regardless to the time or the place, for the value of Islam is universal and eternal.

وَأَنزَلْنَآ إِلَيْكَ ٱلْكِتَٰبَ بِٱلْحَقِّ مُصَدِّقًا لِّمَا بَيْنَ يَدَيْهِ مِنَ ٱلْكِتَٰبِ وَمُهَيْمِنًا عَلَيْهِ ۖ فَٱحْكُم بَيْنَهُم بِمَآ أَنزَلَ ٱللَّهُ ۖ وَلَا تَتَّبِعْ أَهْوَآءَهُمْ عَمَّا جَآءَكَ مِنَ ٱلْحَقِّ ۚ لِكُلٍّ جَعَلْنَا مِنكُمْ شِرْعَةً وَمِنْهَاجًا

“And We have revealed to you, O Muhammad, the Book in truth, confirming that which preceded it of the Scripture and as a criterion over it. So judge between them by what Allah has revealed and do not follow their inclinations away from what has come to you of the truth. To each of you We prescribed a law and a method…” (Al-Maidah: 48)

Islam rules every aspect in our lives, such as ibadah (our relationship with Allah) and muamalah (our relationship with others), and every field as well, such as education, politic, health, and economy. And one of those fields which is close enough to our daily activities is economy.

Economic activities are performed by every person since there is no need of having a high education in it. A simple event as selling and buying is included as economic activities and muamalah at the same time. That’s why economics in Islam is necessary as well as other aspects in our lives.

This article will take a great number of pages if the whole Islamic law in economy is discussed. It is because in Islam, every single thing is ruled in detail. That is why the topic presented here focuses on Islamic law of taking profit, one of the common matters in everyday life.

Profit is a deviation between buying price and selling price. Even though taking profit is often related to a seller as the subject, a buyer should also understand the law in it. Selling and buying are bilateral activities which involve two parties, so they must know their own duties and rights.

According to Muslim scholars, there are some Islamic laws of taking profit which are undoubtedly worth to understand.

• Islam does not set a limit in the matter of taking profit as long as the seller does not cheat the buyer. Syaikh Muhammad ibn Sholeh al-Utsaimin suggests that there is no certain limit of profit since it is a part of blessing from Allah. The profit can be 10%, 20%, 25%, or more than that if there is no cheat in it. In some cases, Allah gives a great blessing to a person so that he can gain 100 or more of profit with only 10 of capital.

عَنْ عُرْوَةَ الْبَارِقِيِّ، قَالَ دَفَعَ إِلَىَّ رَسُولُ اللَّهِ صلى الله عليه وسلم دِينَارًا لأَشْتَرِيَ لَهُ شَاةً فَاشْتَرَيْتُ لَهُ شَاتَيْنِ فَبِعْتُ إِحْدَاهُمَا بِدِينَارٍ وَجِئْتُ بِالشَّاةِ وَالدِّينَارِ إِلَى النَّبِيِّ صلى الله عليه وسلم ‏.‏ فَذَكَرَ لَهُ مَا كَانَ مِنْ أَمْرِهِ فَقَالَ لَهُ ‏ “‏ بَارَكَ اللَّهُ لَكَ فِي صَفْقَةِ يَمِينِكَ ‏”‏ ‏.‏ فَكَانَ يَخْرُجُ بَعْدَ ذَلِكَ إِلَى كُنَاسَةِ الْكُوفَةِ فَيَرْبَحُ الرِّبْحَ الْعَظِيمَ فَكَانَ مِنْ أَكْثَرِ أَهْلِ الْكُوفَةِ مَالاً ‏

“Narrated ‘Urwah al-Bariqi: The Messenger of Allah (pbuh) gave me on Dinar to purchase a sheep for him. So I purchased two sheep for him, and I sold one of them for a Dinar. So I returned with the sheep and the Dinar to the Prophet (pbuh), and I mentioned what had happened and he said, ‘May Allah bless you in your business dealings.’ After that we went to Kunasah in Al-Kufah, and he made tremendous profits. He was among the wealthiest of the people in Al-Kufah.’” (at-Tirmidhi)

Another statement is from Prof. Dr. Sulaiman Alu Isa, a professor of King Saud University. He explains that there is no problem of gaining profit of goods, as long as it is not food because it is categorized as ihtikar or hoarding up. Islam forbids us to hoard up food and sell it at a high price, particularly higher than the market price.

قَالَ أَتَيْتُ يَعْلَى بْنَ أُمَيَّةَ فَقَالَ إِنَّ رَسُولَ اللَّهِ صلى الله عليه وسلم قَالَ ‏ “‏ احْتِكَارُ الطَّعَامِ فِي الْحَرَمِ إِلْحَادٌ فِيهِ ‏”‏ ‏.‏

“Narrated Ya’la ibn Umayyah that the Prophet (pbuh) said, ‘Hoarding up food (to sell it at a high price) in the sacred territory is a deviation (from right to wrong).’” (Sunan of Abu Dawood)

•  It is tolerable if a person sells goods with the price which is higher than the market price. But, it can happen under a condition. The seller must tell the fact or the actual condition to the buyer that the price is different from the market price, in this case is higher.

يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوا۟ لَا تَأْكُلُوٓا۟ أَمْوَٰلَكُم بَيْنَكُم بِٱلْبَٰطِلِ إِلَّآ أَن تَكُونَ تِجَٰرَةً عَن تَرَاضٍ مِّنكُمْ ۚ

“O you who have believed, do not consume one another’s wealth unjustly but only [in lawful] business by mutual consent…” (An-Nisa: 29)

If the buyer agrees with the price set by the seller, then it is fine and does not break the Islamic law, since there are agreement and honesty between the two parties. The seller has the chance to gain the benefits of honesty in Islam and the virtues of truthfulness also. On the other hand, if the seller hides it, it means that he has cheated the buyer, which is not allowed in Islam.

عَنْ حَكِيمِ بْنِ حِزَامٍ، أَنَّ رَسُولَ اللَّهِ صلى الله عليه وسلم قَالَ ‏ “‏ الْبَيِّعَانِ بِالْخِيَارِ مَا لَمْ يَفْتَرِقَا فَإِنْ بَيَّنَا وَصَدَقَا بُورِكَ لَهُمَا فِي بَيْعِهِمَا وَإِنْ كَذَبَا وَكَتَمَا مُحِقَ بَرَكَةُ بَيْعِهِمَا ‏”‏ ‏.‏

“Narrated Hakim ibn Hizam that the Messenger of Allah said, ‘The two parties to a transaction have the choice so long as they have not separated. If they are honest and open, their transaction will be blessed, but if they tell lies and conceal anything, the blessing of their transaction will be lost.’” (Sunan of an-Nasa’i)

• Even though there is no certain amount in taking profit, the sellers are recommended to ease other Muslims’ business by deciding the price based on the market price and not taking advantage of buyers’ carelessness. Allah will give more rewards to such kind act. On the other hand, the buyer should also know the market price so that he is not cheated.

وَلِكُلٍّ دَرَجَٰتٌ مِّمَّا عَمِلُوا۟ ۚ وَمَا رَبُّكَ بِغَٰفِلٍ عَمَّا يَعْمَلُونَ

“They will each be assigned ranks according to their deeds. And your Lord is not unaware of what they do.” (Al-An’am: 132)

In doing business, mainly in taking profit, things we must keep in mind is that we apply the principles of Islamic economic system and do not make the material thing as our orientation. Rather, take as much as we need as the wise way to get blessing from Allah. Perhaps we can lie to humans, but Allah knows everything we do.