Settlement Discounts

Answered according to Hanafi Fiqh by



Are settlement discounts allowed in Islam? I.e. I offer a discount of say 5% if a customer pays in full by a set date?



In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Any discount that a seller offers to a customer is the sole prerogative of the seller. [1] The customer may merely request for a discount but is not entitled to demand for it once the deal has been concluded, whether he/she pays on the agreed date or prior to it. As such, early settlement from the client/customer does not warrant any discount.

It is not permissible to condition a discount with early settlement of any dues. As such, early settlements may not be pre-agreed, be part of any written agreement, or be used as devices to encourage early settlement. [2]

If the seller spontaneously and voluntarily offers a discount at the time of settlement of the outstanding amount, it will be permissible to do so, as long as such a discount does not include the condition of early settlement. [3] A company can state that ‘it may give discounts if dues are settled early’. However, this will not be binding on the company and it reserves the right to refuse discount.

However, if in the case of loans or overdue payments, the creditor/seller may offer early settlement discounts to encourage debtors/clients to pay early. [4]

And Allah Ta’āla Knows Best

Checked and Approved by,

Mufti Nabeel Valli.

Darul Iftaa Mahmudiyyah

Lusaka, Zambia


 [1] الهداية في شرح بداية المبتدي (3/ 59)

قال: “ويجوز للمشتري أن يزيد للبائع في الثمن ويجوز للبائع أن يزيد للمشتري في المبيع، ويجوز أن يحط من الثمن ويتعلق الاستحقاق بجميع ذلك

[2]  أحكام القرآن للجصاص ط العلمية (1/ 566)

وَمَنْ أَجَازَ مِنْ السَّلَفِ إذَا قَالَ عَجِّلْ لِي وَأَضَعُ عَنْك فَجَائِزٌ أَنْ يَكُونَ أَجَازُوهُ إذَا لَمْ يَجْعَلْهُ شَرْطًا فِيهِ، وَذَلِكَ بِأَنْ يَضَعَ عَنْهُ بِغَيْرِ شَرْطٍ وَيُعَجِّلَ الْآخَرُ الْبَاقِيَ بِغَيْرِ شَرْطٍ

[3]  Ibid

[4] بحوث في قضايا فقهية معاصرة (1/29)

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