Commissions Paid to the Agent or Discounts Offered to Him in a Purchase Belong to the Principal who Appointed Him

19-11-2020 | IslamWeb

Question:

Aslamo alaikum brother. I have a retail shop of tiles, marble etc. I am forced by circumstances to pay cut money to the middle man who influence the customer to take the products from my shop. The middle man in general are masoners who does the work in the customer's house. Is the practice halal to me as I am forced to alter the price to accommodate their commission.

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Answer:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.

There is nothing wrong with arranging with a mason, taxi owner, or others who provide services to people so that they would recommend you to their customers in return for a commission you pay to them. Also, there is nothing wrong with increasing the price of the merchandise to cover the commission that you will pay to the middle man, provided that the mason is not a Wakeel (agent) authorized by the employer to purchase merchandise on his behalf. If he is acting as an agent for the employer, he has no right to take a commission from you upon making the purchase unless he informs the employer of it. That is because his duty as an agent entails that he should seek the highest-quality and lowest-priced commodities (to serve the best interests of the principal). When he buys the commodities from you in order to receive the commission, he will not bargain with you over the price and will buy them at higher than their prices in order to receive the commission from you. This act constitutes betrayal of his employer, which is impermissible. Therefore, jurists stated that the commissions paid to the agent or the discounts offered to him during the purchase belong to the principal who appointed him, unless he authorized him to take them for himself.

Allah Knows best.