Calculating the market value of an item

Q: I sell clothing to chain stores as well as other traders. The chain stores mark up their clothing with a very high markup, making 300% to 400% profit. Other traders' mark up is not so high. The chain stores (e.g. Pep or Ackermans) have many 100 of branches in the country compared to the other traders that I sell to. Hence, the total number of traders will be 60 or 70 compared to the number of chain store branches in the country.

When calculating zakaat, the market value is considered. However, the normal traders sell it at R150 and those chains stores sell it at R300. Will one consider R150 as the market value or R300?

If the market value is considered according to the value of the chain stores, it will be quite difficult for the normal traders who only sell it at R150.

A: In our understanding the chain stores are regarded as one buyer. Hence, despite the fact that they have many stores, one will not base the market value according to the price that they are selling, but one will base it on the price of the majority of the traders (60 or 70 traders that you are selling to).

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


Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)