Affiliate marketing
Q: Please advise regarding online affiliate marketing programs:
Affiliate marketing is a type of marketing in which a business (the merchant) rewards an “affiliate” (marketer/advertiser) for each customer he brings to the business by his own marketing efforts. For example, Company Z (the merchant) sells only kitchen appliances online. They run an affiliate-marketing program where Umar (the affiliate) can advertise the merchant’s website on his own website, or other places on the internet – all for a monetary remuneration. Umar puts up an advertisement for Company Z on his own website. The following options are available for Umar, please advise on their permissibility:
1. Pay-per-sale (also called cost-per-sale): In this arrangement, the merchant site pays an affiliate when the affiliate sends them a customer who purchases something from the merchant’s website (in this instance – kitchen appliances). Some merchant websites pay the affiliate a percentage of the sale and others pay a fixed amount per sale. Is this permissible?
2. Pay-per-click (cost-per-click): In these programs, the merchant site pays the affiliate based on the number of visitors who click on the link to come to the merchant’s site. Even if the visitors do not buy anything, the affiliate will still be paid for referring them to the merchant’s site. Is this permissible?
3. Two-tier programs: These affiliate programs have a structure similar to multilevel marketing organizations (also known as “network marketing”) such as Amway or Avon, which profit through commission sales and sales recruitment. In addition to receiving commissions based on sales, clicks or leads stemming from their own site, affiliates in these programs also receive a commission based on the activity of other affiliate sites which they refer to the merchant site. Is this permissible?
4. Questions 1 to 3 above are in the instance of a merchant selling only permissible items i.e. kitchen appliances. Other merchants, like Amazon.com for example, sell a wide range of products, like furniture, electronics, clothing, books, TV’s and movies etc. The difference with such merchants (those that sell both halaal and haraam products) is that irrespective of what the affiliate may have advertised (i.e. something halaal), if a customer is to purchase anything else on account of the affiliate’s link that got him/her onto the merchant’s site, the affiliate will still receive a commission on the sale of such non-affiliate advertised haraam products. For example, Umar advertises only plumbing equipment for Amazon.com with an affiliate link on his website. A person follows this link, purchases the plumbing equipment, but also continues browsing the website and also happens to purchase a haraam video game. Umar now earns a commission on this as well. Thus, his total payout is partly based on the commission from the haraam video game and the commission from the permissible plumbing equipment. Umar is supplied with a detailed breakdown (‘earnings report’) of this total commission from the merchant. He thus knows that, for example, of his $10 total commission earned, $7 is from the direct link to the plumbing equipment and $3 is from the unintended/indirect sale of the videogame commission. By advertising the plumbing equipment, and accordingly bringing the customer to the merchant’s website, Umar did not aid or support the purchase of haraam in anyway. It was solely the discretion of the customer in purchasing the haraam. Will the entire $10 be permissible for Umar?
5. If it is impermissible for Umar to accept the commission from the sale of the haraam item, should he give the commission earned from the haraam item in charity without the intention of reward? Can he continue to earn money through advertising while taking out the commission earned from haraam items and give it in charity?
6. Some merchants pay the affiliate a predetermined percentage based on the type of product sold. Is this, the predetermined percentage that varies per the fixed product categories permissible?
(In all instances, the actual advertisements of the affiliate will not have any animate objects, music, etc. or anything impermissible associated with it at all.)
A:
1. It is better that you confirm a fixed amount.
2. This should be avoided. Since the commission received is based on people purchasing, in the case where they do not purchase anything, the commission received is not permissible, as it is not in lieu of any valid service.
3. In our understanding, a commission based on this principle does not seem to be correct, as the second affiliate site had introduced the client and the first site had in no way introduced the client. Hence, when the first site did not introduce the client in any way, the owner of the first site is not entitled to any commission.
4. Since he had only advertised for a halaal product, he is entitled for a commission for the halaal product, as per his halaal advertisement.
5. If Amazon.com wishes to give him a commission because of the client purchasing haraam items, the commission should not be accepted. If he had accepted the commission, he should return it to them. If they do not wish to accept it, he should give it in charity to a poor person without the intention of receiving reward.
6. When the percentage is determined and acceptable to both parties it is permissible.
And Allah Ta'ala (الله تعالى) knows best.
الإجارة عقد يرد على المنافع بعوض (الهداية 3/293)
وشرعا (تمليك نفع) مقصود من العين (بعوض) حتى لو استأجر ثيابا أو أواني ليتجمل بها أو دابة ليجنبها بين يديه أو دارا لا ليسكنها أو عبدا أو دراهم أو غير ذلك لا ليستعمله بل ليظن الناس أنه له فالإجارة فاسدة في الكل ولا أجر له لأنها منفعة غير مقصودة من العين بزازية وسيجيء (وكل ما صلح ثمنا) أي بدلا في البيع (صلح أجرة) (الدر المختار 6/4)
أما تفسيرها شرعا فهي عقد على المنافع بعوض كذا في الهداية وأما ركنها فالإيجاب والقبول بالألفاظ الموضوعة في عقد الإجارة (الفتاوى الهندية 4/409)
وشرطها كون الأجرة والمنفعة معلومتين لأن جهالتهما تفضي إلى المنازعة وحكمها وقوع الملك في البدلين ساعة فساعة (الدر المختار 6/5)
ومنها أن يكون المعقود عليه وهو المنفعة معلوما علما يمنع المنازعة فإن كان مجهولا جهالة مفضية إلى المنازعة يمنع صحة العقد وإلا فلا ومنها بيان محل المنفعة حتى لو قال آجرتك إحدى هاتين الدارين أو أحد هذين العبدين أو استأجرت أحد هذين الصانعين لم يصح العقد (الفتاوى الهندية 4/411)
قال في المبسوط لا بد من إعلام ما يرد عليه عقد الإجارة على وجه ينقطع به المنازعة ببيان المدة والمسافة والعمل ولا بد من إعلام البدل اهـ وإلا كان العقد عبثا كما في البدائع على أنه لا تمليك بعوض غير معلوم فعاد إلى كلامهم وتمامه في الشرنبلالية (رد المحتار 6/4)
(و) تفسد (بجهالة المسمى) كله أو بعضه كتسمية ثوب أو دابة أو مائة درهم على أن يرمها المستأجر لصيرورة المرمة من الأجرة فيصير الأجر مجهولا (الدر المختار 6/48)
Answered by:
Checked & Approved:
Mufti Ebrahim Salejee (Isipingo Beach)
Q:
(1) Some merchants pay the affiliate a predetermined percentage based on the type of product sold. Is this, the predetermined percentage that varies per the fixed product categories permissible?
More information on this setup:
The advertising fee percentage rates (i.e. the commission payout) you may earn will vary depending on the category of Products that are shipped, streamed, or
downloaded (as applicable) in a given calendar month that constitute Qualifying Purchases. We will determine the classification of Products in each category set forth in Table 1.
TABLE 1 – Fixed Advertising Fee Rates for Specific Product Categories
Link:
https://images-na.ssl-images-amazon.com/images/G/01/associates/2012/asso...
(2) Where a product may not fit in the above categories (Table 1), it falls under the 'General Products' classification. For General Products, a predetermined percentage based on the volume (not type) of sold products is applied. From this, the commission payout for the affiliate is calculated. [Is this permissible?]
More information on this setup:
The Performance Fee Structure allows you to earn higher advertising referral fees on General Products as you increase the number of shipped items generated through your links. General Products include those products that Amazon does not pay a fixed advertising rate for and are shipped by Amazon, select subsidiaries (such as Amazonsupply.com) and third-party sellers.
TABLE 2 – Volume-Based Advertising Fee Rates for General Products
Link: https://images-na.ssl-images-amazon.com/images/G/01/associates/2010/volu...
The following is a general example for this entire percentage-based payout operation given by the Merchant in light of both above questions:
"The following example demonstrates how advertising fee rate calculations work under Tables 1 and 2. If, in a given month, 6 General Products (e.g., 3 books, 1 pair of shoes, and 2 Kindle tablets), 9 Amazon Instant Video Products, 14 Electronics Products, and 2 gift card Products redeemable on the Amazon Site were shipped or
downloaded (as applicable) as a result of orders placed by customers during Sessions initiated through Special Links on your site (the affiliate), then the total number of Products would be 31. The volume-based advertising fee rate for a monthly volume of 7-30 Products would be used to determine your advertising fee rate for General Products because the 2 gift card Product units are not included in calculating the applicable advertising fee tier in Table 2. In this example, an advertising fee rate of 6.00% would apply to Qualifying Revenues from the 6 General Products, an advertising fee rate of 5.00% would apply to Qualifying Revenues from the 9 Amazon Instant Video Products, an advertising fee rate of 4.00% would apply to Qualifying Revenues from the 14 Electronics Products, and an advertising fee rate of 6.00% would apply to Qualifying Revenues from the 2 gift card Products (redeemable on the Amazon site). In this manner, your total commission payout is thus calculated."
A: When the percentage is determined and acceptable to both parties it is permissible.
And Allah Ta'ala (الله تعالى) knows best.
Answered by:
