Islam Stack Exchange is a question and answer site for Muslims, experts in Islam, and those interested in learning more about Islam. It only takes a minute to sign up.
Sign up to join this community
I've heard that selling something for more than its worth is a sin according to the Quran.
I would like to know, by how much can you mark up your items? Is there a limit to the amount of profit you can make on anything you sell? Is there any specific formula or limitations to the percentage of mark up?
Asssalaamualaikum brother. I had attended a lecture of sheikh Asim Al Hakeem and this is what was asked. here is the answer.
If there is a seller of a product that has many different brands , he has the right to place his profit margin as much as he wants to. For example , If a person wants to buy a car , he has many alternatives like Maruti , Honda ,Chevrolette etc. If Volkswagen have their cars twice as expensive with extremely high profit margins , it would be ok because the buyer has other alternatives available. This is the case if there's no monopoly .
In case there's a monopoly in some product ,i.e a company is the sole seller of the product , then the profit margin needs to be small and enough to sustain the Entrepreneur , his company and also provide some scope of development. It should be minimum ( to fulfill these 3 conditions) so as to cater to the needs of people with different financial backgrounds.
In case he doesn't wish to do that and wants to keep a high profit that would make it difficult for financially poor people, is is the duty of the ruling authority to impose orders and restrictions to curb the unnecessary inflation.
There is no specific ruling though on a prescribed profit margin.
But here's a hadith and most scholars have the same opinion as stated above:
In Islam the market is to be free and permitted to respond to the natural laws of supply and demand. Thus, when the prices became high in the Prophet's time and people asked him to fix prices for them, he replied, Allah is the One Who fixes prices, Who withholds, Who gives lavishly, and Who provides, and I hope that when I meet Him none of you will have a claim against me for any injustice with regard to blood or property. (Reported by Ahmad, Abu Daoud, al-Tirmidhi, Ibn Majah, al-Dari and Abu Y'ala.)
With these words the Prophet of Islam (peace be on him) declared that unnecessary interference in the freedom of individuals is injustice and that one should meet Allah free of blame for such a thing. If, however, any artificial forces, such as hoarding and manipulation of prices by certain merchants, interfere in the free market, public interest takes precedence over the freedom of such individuals.
Baarakallahu Feekum..
There is no fatwa or Aya or Hadith for the upper limit of sales profit in Islam.
But you have to know that monopolism is not acceptable in Islam, more over when doing the sell and buying the buyer must not cheat or lie in the price.
The buyer has to say this product price is X and the average price in the market is Y and then the customer decide whether to buy or not.
