Early settlement discount

Q: Will it be permissible for one to make an agreement with the supplier, at the onset before purchasing, that for example, the terms will be 30 days with a discount of 5%? There are a few supplier with whom we have an agreement such as the one described above and we keep to the arranged terms. However, the time period and discount differs from supplier to supplier. If this is not permissible, then what is the solution to rectify the situation?

Bismillaah

A: If the credit period is set and the supplier attaches the condition at the beginning that if one pays before the period, then he will receive a discount (e.g. The customer purchases goods worth R100 000 on a three month credit basis and he is told, “If you pay within one month, you will receive a 10% discount”), then in this case, if one has to pay earlier and take the discount, then the discount one receives is riba (interest) and will not be permissible.

However, if at the beginning they mutually agree that the credit period is one month and not three months, and similarly it is mutually agreed that the one month credit price is R90 000, then it will be permissible, provided that they both agree that the credit period is only one month and not three months. In this case, if the purchaser has to default and delay after one month, he will not be charged R100 000 which is the three month credit price. Rather, he will still be charged R90 000.

And Allah Ta’ala (الله تعالى) knows best.

قال ولو كانت له ألف مؤجلة فصالحه على خمسمائة حالة لم يجز لأن المعجل خر من المؤجل وهو غير مستحق بالعقد فيكون بإزاء ما حطه عنه وذلك اعتياض عن الأجل وهو حرام (الهداية 3/ 251)

( ولا يصح عن دراهم على دنانير مؤجلة ) لعدم الجنس فكان صرفا فلم يجز نسيئة ( أو عن ألف مؤجل على نصفه حالا )

قال : قوله ( أو عن ألف مؤجل على نصفه حالا ) لأن المعجل غير مستحق بعقد المداينة إذ المستحق به هو المؤجل والمعجل خير منه فقد وقع الصلح على ما لم يكن مستحقا بعقد المداينة فصار معاوضة والأجل كان حق المديون وقد تركه بإزاء ما حطه عنه من الدين فكان اعتياضا عن الأجل وهو حرام ألا يرى أن ربا النسيئة حرم لشبهة مبادلة المال بالأجل فلأن يحرم حقيقة أولى اهـ درر (تكملة رد المحتار 8/ 253)

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)