Valid & Invalid transactions

Drop shipping

Q: Is the trading concept of ‘drop shipping’ permissible? In ‘drop shipping’, the trader does not keep stock of any item. Instead, he accepts payment for the goods and then forwards the customer’s details to the supplier who will deliver directly to the customer. ‘Drop shipping’ is commonly found in online shopping. Is this permissible?

Cheating in a sale

Q: My neighbour wanted to buy a cooking pot for R100. I told her not to buy it as I will get one for her for just R70. She agreed because she was saving R30 on the same pot. However, my intention was that I will buy the pot for just R55 and tell her that it cost R70. In this way, I will make R15 without telling her. Is this permissible?

Early settlement discount

Q: Please advise if the following type of transactions are valid, not valid or improper:

A business has an agreement with a supplier to pay after 30 days from date of delivery with a limit of R50 000.00. 

1. The business puts a condition on all purchase orders, that should the supplier request an earlier payment, it will incur a early settlement discount of x% on a daily basis.

2. At times the business goes over the limit of R50 000.00 , hence early payment now becomes binding in order for the supplier to deliver further orders, can the business in this situation claim the x% early settlement discounts.

Cancellation of a transaction upon a specific time limit

Q: I want to sell a piece of land. The total price is R1.5 million. The buyer will pay me a 33% deposit as an upfront payment and the rest within 6 months, and then only will I hand over the land papers and land to him. If the purchaser fails to give me 67% within these 6 months, the sale will be cancelled and the purchaser will lose the 33% deposit. Is this clause permissible (forfeiting the initial deposit)?

Selling sweets for a madrasah

Q: I am standing at a stall in a madrasah and selling things for the madrasah such as sweets, etc. The items do not belong to me but to the madrasah. Can I purchase items for myself from the stalls, or would this be impermissible since I would, in essence, be the buyer and the seller at the same time?

Selling bricks which one does not own

Q: If I don’t have stock in my business, can I sell the goods? For example, a client comes and purchases a load of bricks and wants it delivered to his house. He pays us for the bricks and delivery, and though we don’t have it in stock, we accept the money. We then collect the bricks from the brick manufacturer and deliver it directly to the client’s house. Is this permissible?