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Fixing a cash price and a credit price


Question:

Whilst dealing with customers, we come across customers that request a quote of a cash price. Generally, if our normal price is R220 for a wheel barrow and the customer generally has the option to pay 30 days from statement.

Where a cash price is requested, we would quote a lesser price of R210 although our services, delivery etc, will still remain.Does this reduction of the price for the purpose of receiving the cash imply that our normal selling includes a finance cost .i.e. Is the R220-R210=R10 a finance cost?



Answer:

The concept of fixing a cash price and a credit price is permissible in Shariah. This is permissible on condition that the price and time is fixed. The R10 will be considered to be a discount in favour of the customer paying in cash. (al-Hidayah, Ahsanul Fatawa, Vol: 7, Pg: 30) 

And Allah Knows Best

Mufti Suhail Tarmahomed

Checked and Approved:

Mufti Ebrahim Desai 

Jamiatul Ulama (KZN) Fatwa Department

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