can we issue store credit/rain check

[fnaeem]

:salam:

If a person comes in my store to buy a product, and I am out of it. I can issue him a store credit/rain check. This is to be redeemed later for an same product (the product, the customer originally wanted) or another product of similar value. The stores in the west routinely do this.

Typically it will say something like value of the store credit is $10, and it is said that it is not redeemable for cash (must buy product). Sometimes there will be an expiration date, after which the store credit is null and void.

My questions are:


If a monetary value is assigned to store credit, is it creating money out of thin air (riba) ?
Is it better to say this coupon is worth 10 points, product can be priced in points for those presenting coupons?
Can we say that this coupon has no monetary value, even though if we had the product in stock we would not have issued the coupon but charged the user an amount on their form of payment ?
Can we set a date of expiration of the coupon ?



:jazak:

[abuhajira]

:salam:

Could you explain this again.

If some product is not there, You buy a credit voucher?

Why does the store give you this rain check when you can buy the similar amount worth product anyway.

[fnaeem]

:salam:

you dont buy the voucher. the store gives it to you as customer service ("sorry for the inconveniece, product is out of stock").
you can use the voucher to buy the particular product when it comes in stock at a later date.
or similar product today(think lipton tea vs tapal tea). Its not exactly what the customer was looking for so the store gives him raincheck/store credit. Its all around customer service.
btw the store in this instance is going to be a phone-app.

['Abdullaah]

:salam:

Another example is, item A goes on sale for $100, while the regular price is $150.
You go to buy it during the sale period, but they are out of stock.
They issue you a "rain check". It's a slip of official paper with date and value of the item written on it (in this case, $100).

You bring the rain check within the next 60 days to the store, and even if the price is at regular $150, they will let you buy it for $100 to honor the rain check which they had issued to you.

Wallaahu A'lam.
:salam:

[fnaeem]

:salam:

although br Abdullah has given a valid scenario also, in my case it is just out of stock stuff. not a honor the sale price situation.

Looking forward to your replies Mufti Sahib.

:jazak:

[Shuayb Abdul-Khaaliq]

:ws:

Example of a raincheck in the USA:

1. Walk into your favorite drugstore because they have XYZ brand 12-pack paper towels on sale for $6.99, normally $9.99.
2. Due to the sheer popularity of this sale for $3 off XYZ brand 12-pack paper towels, they have all been sold out, while the sale is still on for another 2 days.
3. The store now gives the customer the option to take a "raincheck", which is a piece of paper with information in regards to the item which the raincheck is for (XYZ brand 12-pack paper towels in this case), the sale price ($6.99 in this case), and the quantity which the customer wants (in other words, the quantity they were 'really' looking to buy if the store had this item in stock today).
4. Now you take this 'raincheck' and leave the store.
5. Come back to the store 2 weeks later. They now have XYZ brand 12-pack paper towels back in stock. However, there has been a disaster... the price has gone back up to $9.99 from $6.99 since the sale ended. Worry not, because you have your RAINCHECK! Just grab the item(s) and take them to checkout, present the raincheck to the cashier and they will adjust the price to $6.99 for the XYZ brand 12-pack paper towels. Now you got your paper towels for the same sale price that they were two weeks ago.

:jazak:

:salam:

[abuhajira]

:salam: fnaeem,

One more clarification if I may,

lets set a scenario. Product "A" is shelved at $10. Amar enters the store and "A" is not in stock. The store gives him a credit voucher for $10. A week later Amar comes back.

a. "A" is in stock but at $15. How much Amar buys it for?
b. "A" is in stock at $15 but Amar buys "B" which is priced at $10. How does this sale go through?
c. "A" is in stock at $15 but Amar buys "B" which is priced at $15. How does this sale go through?

This is for my further understanding. InshAllah I will reply to your questions thereafter.

:ws:

[fnaeem]

:salam:
The voucher is issued as a "sorry my fault", payment is not taken for the voucher. Its a goodwill gesture.
my goal is to make this shariah compliant. I am presenting two possible ways of doing it.
Scenario1: One is to state that the voucher is worth $10.
Scenario2: The other is to state the voucher is worth 1 object. All objects in the store carry the same price.

All the questions mentioned in the post above are only applicable in the first scenario. In the second scenario the user just buys whatever he wants to buy. Since the objects are at the same price, it doesnt matter to me (shopkeeper).

a) Scenario 1: Amar uses voucher + $5 on top of it.
b) Scenario1 : Amar uses voucher for B and the voucher is exhausted.
c) Scenario1: Amar uses voucher + $5 on top of it for B.

a) Scenario 2: Amar uses voucher to buy A and the voucher is exhausted (no extra payment).
b) Scenario 2: Amar uses voucher to buy B and the voucher is exhausted.
c) Scenario 3: Amar uses voucher to buy B and the voucher is exhausted (no extra payment).

From a business perspective it is better to do Scenario 1, but if it is not halal then Scenario 2 is acceptable also.

:jazak:
Faisal

[abuhajira]

:salam:

JazakAllah, that makes it clear for me now.

Hereunder are your answers

a. If a monetary value is assigned to store credit, is it creating money out of thin air (riba) ?


No, it will not be riba. The credit voucher is not a thaman (money), rather the shopkeeper is extending a discount on the item for future period.

b. Is it better to say this coupon is worth 10 points, product can be priced in points for those presenting coupons?


Yes, you may attribute points if you like. However making it $10 is also fine.

Can we say that this coupon has no monetary value, even though if we had the product in stock we would not have issued the coupon but charged the user an amount on their form of payment ?

Essentially the coupon does NOT have any monetary value. It is a gesture from the shop owner to give a discount of $10 on the next visit or when the person presents that voucher. **

Can we set a date of expiration of the coupon ?

Yes you can. (just like an expiration date is set to any promotional sale or a discount offer)

--

Some technical issues (You need not worry about these if you dont want to)
** Please take note of these issues.

The nature of these credit voucher shar'an is simply a discount promise. It is as though you give Amar an offer that if you buy product A from me in next week I will give you $10 off.
a. Now take note that this is ONLY a discount offer promise. Which means it is NOT binding on you to give this discount.
b. This means that it is your moral duty to stand by your promise and oblige to the promissory discount you extended. If you do not give the discount, then shar'an there is no liability on you. However you will be liable of breaking your promise in sight of Allah.
c. Technically, you extend a promise of discount. When Amar comes back later on to buy the product, it is a completely new negotiation of offer and acceptance, and based on the voucher you reduce the price of the product by $10. So if the item A was only $15, then with the new offer and acceptance the agreed price is set at $5. For an onlooker it looks as if you gave discount, while in reality you have renegotiated the price at a lower price.
d. If the product was $10 in the first place and the voucher of $10 was given, then at the later meeting when Amar comes to buy the item A. He will give the voucher to you and you give item A to Amar. This will NOT be a sale, rather a hiba (gift), because essentially you have simply given over the item for no price in return. The voucher was simply a reminder to you of your promise. This means that the rules of hibaa will apply and not of sale.

There are quite a few other points which I had to consider but I feel there is no point mentioning them as they will confuse the matter further rather than explain it away.

:ws:

[fnaeem]

:jazak:

for the detailed and clarifying reply.

Where can I read about the rules of hibaa ?

:ws:

[abuhajira]

:salam:

Here is the chapter of Hibaa from Heavenly Ornaments. InshAllah I will see if I can post some sifted out rulings which will be pertinent for business usage.

HIBA or GIFTS

1. You gave an item to a person and he accepted it. Alternatively, he did not accept it verbally, instead, you placed it in his hand and he took it. That item will now be his and it no longer belongs to you. In the Sharî‘ah this is known as hiba - a gift or present. There are several conditions for this. One is that you have to hand over the item to the person and he has to take possession of it. If you tell him that you are giving him this item and he says that he is accepting it but you have not handed it over to him as yet, then this giving of yours is not correct. The item will still be considered to be under your ownership. However, if he takes possession of it he will become its owner.
2. You placed the item in front of him in such a manner that if he wishes he can take it, and you say to him: "Here, take this." By placing the item in such a way, he will also become its owner. It will be regarded as if he picked it up and took possession of it.
3. You gave a person clothing that is kept in a locked trunk but did not give him the keys to the trunk. This will not be regarded as taking possession of the item. Once you hand over the keys, possession will take place and he will become the owner of the clothing.
4. There is oil or any other substance in a bottle. You gave the bottle to a person but did not give him the oil. This giving will not be correct. Even if he takes possession of it he will not become its owner. Only when you take out your oil from it will he become its owner. If you give the oil but not the bottle and the person takes the bottle with the oil and tells you that he will empty the oil out and then return the bottle to you, then giving the oil in this manner will be correct. Once he takes possession of it he will become its owner. In short, if you wish to give a bottle, utensil, etc. it is a prerequisite to empty the utensil first. It is not permissible to give it without first emptying it. Similarly, if anyone gives a house, he must remove all his belongings and he himself must come out of it and then hand it over.
5. If you wish to give a person a portion of a certain item (i.e. half, quarter, one third or whatever the case maybe), first check the nature of the item. Will it be of any use after being divided or not? If it will not be of any use after dividing it, it will be permissible to give it. Such items are: a grinding mill that if it is split in half, it will not be of any use, a bench, a bed, a utensil, a pitcher, a bowl, a tumbler, a trunk, an animal, etc. Once the person takes possession of such items he will become owner of that portion which you have given to him and the whole item will come under a partnership between both of you.
If the item is such that if it is divided it can still be of use, then it is not permissible to give it without dividing it. Such items are: a plot of land, a big house, a roll of material, firewood, dry groceries, milk, yoghurt, etc.
You tell a person: "I am giving you half the ghee that is in this container." He replies: "I accept it." This giving will not be correct. In fact, even if he takes possession of the container he will not become the owner of that ghee. All the ghee still belongs to you. However, if you thereafter separate half the ghee and hand it over to him, he will become its owner.
6. Two persons purchased a length of material, a house or a farm and each one paid half the money for it. As long as they do not divide it, it is not permissible for any one of them to give his share away to anyone.
7. You gave R10 to two persons and told them to take half each. This is not correct. Instead, you should divide both in half and then give it to them. However, if both of them are poor, it is not necessary to divide it. If you give one cent to two persons, this will be correct.
8. A goat or cow is pregnant. It is not permissible to give the young of the goat or cow to anyone before it can be born. In fact, even if the person takes possession of it after it is born, he will not become its owner. If you wish to give it, you must give it again after it is born.
9. A person gives you a goat and tells you that he is not giving you the kid that is in its stomach and that it belongs to him. The goat and the kid now belong to you and the person does not have the right to take the kid away.
10. A certain item of yours is kept with someone as an amânah. You gave that very item to that very person. In such a case that person will become its owner by merely stating that he has accepted it. It is not necessary for him to go and take possession of it again because it is already in his possession.
11. If an immature boy or girl give their possession to someone, this will not be correct. It is also not permissible to take anything that they give. Remember this mas'ala well because many people are neglectful in this regard.

Giving to children

1. When anything is given to a child on the occasion of his circumcision or any other such occasion, the purpose and object is not to give the child but to his parents. All those gifts are therefore not the possession of the child. Instead, the parents are its owners and they can do whatever they wish with those gifts. However, if a person gives an item specifically for the child, he will be its owner. If the child has reached an age of understanding, it is sufficient for him to take possession of the item himself. Once he takes possession of it, he will be its owner. If the child does not take possession of it or is incapable of doing so, then by the father taking possession of it, the child will become its owner. If the father is not present, the child will become its owner by the grandfather taking possession of it. If the father and grandfather are not present, the guardian of the child should take possession of it. If the mother or grandmother take possession of the item despite the father or grandfather being present, it will not be considered.
2. If the father or the grandfather (in the absence of the father) wish to give the child or grandchild a gift, it is sufficient for them to say: "I have given this to the child." In the absence of the father or grandfather, if the mother or brother wish to give a gift to the child and this child is also under their care, then by their saying the above words, the child will become its owner. It is not necessary for anyone to take possession of the item.
3. When wishing to give anything to your children, ensure that you give it equally among your children. The son and the daughter should be given equally. If you give one of your children more than the others, there is no harm in this. However, you should not have the intention of causing harm to the one whom you gave less. If this is your intention, it will not be permissible to give him less.
4. Anything that belongs to an immature child should only be utilised for him. It is not permissible for anyone to utilise it for their personal purposes. Even the parents should not utilise it for their personal purposes nor for any of the other children.
5. If an item is given outwardly to the child but the actual purpose was to give it to the parents, but the person gave it in the name of the child because he considered the gift to be insignificant, then that item will be considered to be under the ownership of the parents. They can utilise it as they wish. Furthermore, one should see who has given the gift. If the gift was given by the wife's relatives, it will belong to the wife. If it was given by the husband's relatives, it will belong to the husband.
6. You sewed a set of clothing for your immature child. That child will now be its owner. You made a set of jewellery for your immature daughter. She will now be its owner. It will not be permissible to give that clothing or jewellery to any other boy or girl. It should be given to the one for whom it was made. However, if at the time of making it, you clearly stated that this item belongs to you and that you are merely loaning it to this child, the item will belong to the person who made it (or got it made). It is the habit of many elder sisters and also mothers to borrow a scarf and other items from their immature sisters or daughters. It should be noted that it is not permissible to borrow such items even for a little while.
7. Just as an immature child cannot give any of his possessions to anyone, in the same way the father cannot give any of the possessions of his immature child to anyone. If the parents give any of the possessions of the child to anyone or lend it to anyone, it will not be permissible to accept it. However, if the parents have a severe need for it on account of poverty and cannot obtain it from anywhere else, then at such a time of need and desperation it will be permissible for them to take an item that belongs to the child.
8. It is not correct for the parents to loan the wealth of the child to anyone. In fact, it is not correct for the parents themselves to borrow the wealth of the child. Remember this well.

Taking back something that has been given

1. It is a major sin to take back something that you have given. If a person takes back something that he has given and the person gives it back willingly, then the person who had originally given the item will once again become its owner. However, there are certain things which the person has no right to take back, e.g. you gave a goat to a person. This person fed that goat so well that it became fat and healthy. In such a case you do not have the right to take it back. Alternatively, you gave a plot of land to a person. He constructed a house on that plot or turned it into an orchard. In such a case you do not have the right to take it back. Alternatively, you gave a length of material to a person. He sewed a garment out of it, dyed it or had it washed. You do not have the right to take it back.
2. You gave a goat to a person. After some time it gave birth to kids. You can take the goat back but you do not have the right to take the kids.
3. If the person who gives an item or the person who receives it dies after the item was given, the right to take it back no longer remains.
4. A person gave you something. You also gave her something in return for this and said to her: "Sister, take this in return for the item that you gave me." After giving this item in exchange, you do not have the right to take it back. However, if you did not tell her that you are giving this in exchange for what she gave you, you have the right to take back your item and she also has the right to take back the item that she gave you.
5. The husband gave something to his wife or vice versa. They do not have the right to take back whatever they give. Similarly, if a person gives something to a relative with whom marriage is harâm forever and this is a blood relation, such as brother and sister or nephew and niece, they do not have the right to take back whatever they give. If the relative is such that marriage is not harâm with him or her, such as one's cousin, then one has the right to take back whatever one gives. Similarly, if marriage is harâm but the relationship is not a blood relationship, instead it is a relationship based on breast-feeding or some other relationship such as foster brothers or sisters or son-in-law, mother-in-law, father-in-law, etc., then in all these cases one has the right to take back whatever one gives.
6. All the cases wherein we have mentioned that one has the right to take back what one gives, means that he will only have the right to take it back if the person is also willing to give it back, as mentioned in the beginning. However, there is also a sin in doing this. If the person is not willing to give it back and does not give it back, one does not have the right to take the item forcefully without first obtaining a ruling from a judge in his favour. If he takes it forcefully without obtaining a ruling from a judge, he will not become its owner.
7. Most of the rules that have been mentioned with regard to the giving of gifts also apply to giving in the path of Allah, e.g. an item will not go into the ownership of a poor person without the latter taking possession of it. The item which has the prerequisite that it has to be divided before it can be given, this prerequisite will also apply here. The item which has to be emptied before it can be given will also have to be emptied in this case.
However, there are two differences. One is that when you give something you have the right to take it back if the person is willing to do so. However, when you give something in the path of Allah you do not have the right to take it back. The second difference is that if you give a certain amount of money to two poor persons and tell them to share it between themselves, it will be permissible to do so. However, when giving a gift to someone, you cannot ask them to divide the money.
8. You were going to give R10 to a poor person but you mistakenly gave him a R20 note. You do not have the right to take it back.