Selling Store Credit at a Discount

Answered according to Hanafi Fiqh by

Answered by Shaykh Faraz A. Khan

Question: Is it permissible to sell a ‘credit’ at a discount? For example, you may have purchased some service which is non-refundable, but transferable. Lets say you have a $500 credit. Is it ok to sell this $500 credit for the item/service at a discount for $450 (to enable a sale) so that you obtain some money instead of losing it completely?

Answer: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and states. Please pardon me for the undue delay in response.

What is impermissible is a direct ‘credit-for-cash’ transaction (bay` al-dayn), since in Islam money cannot be sold for money. Credit can be sold for an item or service. [Mawsili, Ikhtiyar]

So for example, if you exchanged the store credit for an item and then sold that item (for a discount or profit), it is allowed. Or if you registered a third party for a service in exchange of the credit, and then took money from the third party (for a discount or profit), it is allowed. But you cannot sell an ‘IOU’ directly for cash.

And Allah knows best.

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