International trade and other sales : return check charge

Fatawa Question

Assalamu Alaykum Wa Rahmatu Allah. At first I want to tell you that I love you for the sake of Allah. I am a retailer and I have some questions regarding the retail business dealings. 1) As a retailer I do accept payment by check. Usually I never have a problem with checks returned but once in a while I get checks bouncing back to me. My bank charges about $ 7.00 for a returned check and I do charge at least $ 20.00 for bounced checks. The customers know the fee amount that I charge for these bounced checks. Is this a form of Riba ? I normally consider my time of processing the payments, the driving time to the bank and the lost opportunity of selling the merchandise that the customer bought, and the loss of the usage of the money since it is not in my bank account. you can estimate your time and driving cost but you cannot include lost opportunities, the lost opportunities are a justification of Riba and are not recognized in Shari’ah because they are merely speculative not reality in contrast to your time and out of pocket cost. If this instance is rare I suggest charging only the 7 dollar by offering a discount to the customer of 13 dollar if she makes quick remedy. 2) I sell merchandise to high schools and I give them bulk purchase discounts but I tell them that they have to pay me within 30 days of receiving the merchandise or else they will lose their discount. Is this a permissible way ? It is permissible but yet on the border because from one angle it is like a sale at two prices one within 30 days and the other after 30 days. The difference in sale at two prices is described as being Riba by the Prophet, PBUH. On the other hand there is a good point in offering a discount for quick payment especially that the objective of it is not to be an increment on deferment but rather an encouragement to pay within the contracted period. This is why I says it is permissible in spite of the similarity. 3) As you know the new government regulations in the US forced banks to change their business dealings and there is no more free checking accounts unless you have a certain amount of money sitting in your bank account at all times which I cannot afford doing. When I talked to my banker he mentioned that the only way to avoid fees on the account is to open a saving account and you can require that the account will be free from interest which I agreed to do but when I received the paper work. It read "The Internal Revenue Service (IRS) requires us (the bank) to keep a signed, certified form W-9 for each customer who has an interest-bearing deposit account". Is it ok to go ahead and sign the documents for this account ? I want to mention that It is not necessary to have this account open although it makes things a bit easier for me. You can open the account as long as you keep it without interest in spite of this document. What you cannot do is to receive the interest and re-channel it as payment of fees of the checking account. Jazaka Allahu Khair. Brother, I appreciate it if you can reply your answers to my e mail Salam Jamal

Fatwa

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Publication Date

2011-09-17

Main Subjects

Financial and Accounting Sciences
Religion
Law
Islamic Studies

Topics

• Islamic jurisprudence
• Retail trade
• United States
• Usury
• Discount
• Cheques
• Bank accounts

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-734317

• APA
• MLA
• AMA