Charging an admin or handling fee when a customer cancels the lay-by

Q: I often sell goods on lay-by. It is becoming more frequent that the buyer cancels the lay-by after having paid part of the agreed amount. I then refund him the paid amount.

When this happens, is it permissible for me to charge the buyer a handling fee or admin fee of say 10%?

A: If the sale of the goods did not take place and the goods remained in your possession, then since no sale had taken place between yourself and the prospective purchaser (as the person intended to purchase it upon paying for it in full), if the person cancels his intention to buy, you do not have the right to charge him a handling fee or admin fee.

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

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)