Ethics: How to Cope with Unfair Prices?

Unfair Prices and Islam

Islam does not mandate a specific profit margin in trade, such that a certain amount is permissible and anything beyond that is not. Instead, it leaves it to the mutual consent of the seller and buyer. The owner can sell their goods for whatever price they wish, as long as there is no deception or fraud involved, and the buyer is under no compulsion; they have the choice to buy or not.

Regarding the permissibility of earning profit through mutual consent in trade, Allah Almighty says: "O you who believe, do not consume one another's wealth unjustly, but only in lawful business by mutual consent" (Quran 4:29, Kanzul Iman translation).

Sometimes, price increases are not due to the ill intentions or hoarding of the shopkeeper. The shopkeeper might be innocent and helpless, as external factors can lead to price hikes. For example, if traders in the market significantly raise the prices of food items, shopkeepers have to buy them at higher prices and then sell them at a profit. However, due to government-imposed price controls, they may have to sell at a price lower than their purchase cost, resulting in a loss. In such cases, government price setting is oppressive. During the Prophet Muhammad's (PBUH) time, prices rose, and the companions asked him to set prices. He replied, "Allah is the one who sets prices, who withholds, who gives lavishly, and who provides, and I hope that I meet Allah without anyone making a claim against me for injustice regarding blood or property."

However, when shopkeepers' ill intentions and excessive profiteering cause hardship for people, as is often seen in our country, Shariah gives the government the authority to set a fair profit margin and curb wrongful profiteering. For example, during Ramadan, instead of lowering prices, there is often a dramatic increase, which harms the public. In such cases, Islam permits the government to set fair prices for food items, ensuring that people can easily access necessities. Therefore, buying from these shopkeepers at government-set prices is permissible and the sale is valid.

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Until the next video, Allah Hafiz.

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