What is the ruling of reselling items without the knowledge of the seller?
The ruling of reselling items without the knowledge of the original seller is permissible if full ownership is obtained and if it is not, the ruling is haram.
Background of the Issue
Resell means reselling an item sold by a seller as the second person after the original seller. This situation normally takes place when a founder develops a product at a certain price with a limited number of productions, then a third party takes this chance by buying the product in large quantity and resells it at a higher price. Generally, a founder is the one who regulates the market price by stating the ceiling price for the sales of the product to avoid exploitation of price from the third party. Generally, the ruling of the situation can be ruled from several perspectives like the ruling of ihtikar and the ruling of reselling items not in possession.
Arguments and Analysis
The Ruling of ihtikar
Ihtikar is an action of hiding specific items. Ihtikar literally means suspending food until the price rises. While technically, madhhab Shafi’e defines ihtikar as buying basic needs during the time of crisis and suspend them to a period of time to sell them with a higher price due to the less amount of the items in the market. (See Nihayatul Muhtaj 3/456).
The original rule for ihtikar is haram as mentioned in the hadith of Prophet Muhammad PBUH narrated by Mua’mmar al-Adawi:
لاَ يَحْتَكِرُ إِلاَّ خَاطِئٌ
No one hoards but the sinner.
Sahih Muslim (1605)
Ihtikar can be understood by hiding an item and reselling it when there is high demand with a higher price. Imam al-Ramli states in his book:
بِأَنْ يَشْتَرِيَهُ وَقْتَ الْغَلَاءِ: أَيْ عُرْفًا لِيُمْسِكَهُ وَيَبِيعَهُ بَعْدَ ذَلِكَ بِأَكْثَرَ مِنْ ثَمَنِهِ لِلتَّضْيِيقِ حِينَئِذٍ،
“By buying (the item) during the time of ghala’ (the price surges) where normally he keeps and resells it with a higher price due to lack of resources at that time”
(See Nihayatul al-Muhtaj 3/472)
Al-Qadhi al-Ruyani states in his book Bahr al-Mazhab fi Furu’ Mazhab al-Shafi’e:
الاحتكار محرم في الجملة لما روي عن النبي صلى الله عليه وسلم أنه نهى عن احتكار الطعام.
“Ihtikar is generally haram as narrated by Prophet Muhammad PBUH where he PBUH prohibits ihtikar food”
(See Bahr al-Mazhab fi Furu’ Mazhab al-Syafi’I 5/177)
Ihtikar only happens upon basic needs related to food during that time where resources are very limited. This is mentioned by al-Syarbini:
وَيَخْتَصُّ تَحْرِيمُ الِاحْتِكَارِ بِالْأَقْوَاتِ،
“It is specified the prohibition of ihtikar upon staple food”
(See Mughni al-Muhtaj 2/392)
Selling Items Not in Possession
Selling items not in possession contradicts shara’ as the transaction may lead to haram actions like gambling and uncertainty. This is because the seller cannot guarantee any transfer of the item to the buyer because he does not have full ownership of the item. Next, among the condition of sales and purchase is people in the transaction should be the owner of the goods or exchange item, or act as the proxy like what is stated by Imam Ramli in his book Nihayatul Muhtaj ila Syarh al-Minhaj. Sales and purchase of items not in possession are stated in several hadith on the prohibition towards the transaction.
Hakim bin Hizam once asked the Prophet PBUH:
يَا رَسُولَ اللَّهِ يَأْتِينِي الرَّجُلُ فَيَسْأَلُنِي الْبَيْعَ لَيْسَ عِنْدِي أَبِيعُهُ مِنْهُ ثُمَّ أَبْتَاعُهُ لَهُ مِنَ السُّوقِ . قَالَ " لاَ تَبِعْ مَا لَيْسَ عِنْدَكَ "
"O Messenger of Allah, a man may come to me and ask me to sell him something that I do not have. Can I sell it to him then go and buy it from the market?' He said: 'Do not sell what you do not have.''
Sunan Abi Dawud (3503), Sunan al-Nasaie (4613), Jami’ al-Tirmidhi (1232) and Sunan Ibn Majah (2187)
Imam al-Muzani states in his book Mukhtasar al-Muzani that sales and purchase that is not yet owned by us means selling of products which have not fully given and accepted by us, even if the products are already bought, and the payment possibly is made. This prohibition is based on the hadith of Ibn Abbas where the Prophet PBUH said:
مَنِ ابْتَاعَ طَعَامًا فَلاَ يَبِعْهُ حَتَّى يَسْتَوْفِيَهُ
He who buys food grains should not sell it until he has taken possession of it.
Ibn Abbas said:
وَأَحْسِبُ كُلَّ شَىْءٍ مِثْلَهُ
All things are considered the same (in this regard)
Sahih al-Bukhari (2136) and Sahih Muslim (1525)
Ibn Umar said,
وَكُنَّا نَشْتَرِى الطَّعَامَ مِنَ الرُّكْبَانِ جِزَافًا فَنَهَانَا رَسُولُ اللَّهِ أَنْ نَبِيعَهُ حَتَّى نَنْقُلَهُ مِنْ مَكَانِهِ
"We used to buy food from troops of riders (i.e., the caravans) without knowing the amount, but the Messenger of Allah (ﷺ) forbade us to sell it until it had been delivered to us."
Sahih Muslim (1527)
In another narration, Ibn Umar also said,
كُنَّا فِي زَمَانِ رَسُولِ اللَّهِ صلى الله عليه وسلم نَبْتَاعُ الطَّعَامَ فَيَبْعَثُ عَلَيْنَا مَنْ يَأْمُرُنَا بِانْتِقَالِهِ مِنَ الْمَكَانِ الَّذِي ابْتَعْنَاهُ فِيهِ إِلَى مَكَانٍ سِوَاهُ قَبْلَ أَنْ نَبِيعَهُ
"In the time of the Messenger of Allah, may Allah bless him and grant him peace, we used to buy food. He sent orders for us to move our purchases from the place in which we purchased them to another place before we re-sold them."
Sahih Muslim (1527)
The scholars of madhhab al-Shafi’e categorize selling of items not in possession under gharar sales and purchase. This is mentioned by Imam al-Muzani:
وَلَا يَجُوزُ بِحَالٍ وَمِنْ بُيُوعِ الْغَرَرِ عِنْدَنَا بَيْعُ مَا لَيْسَ عِنْدَك
“It is prohibited (gharar sales and purchase) in any condition whatsoever and among gharar sales and purchase according to us is selling something not in your possession”
(See Mukhtashar al-Muzani 8/185)
Selling Items Fully Owned
The original ruling for sales and purchase is permissible as long as there is no haram element in it. Selling and buying an item with full ownership in halal methods is permissible as long as the item is also halal according to shara’. Allah SWT says:
ذَٰلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا ۗ وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا
That is because they say, "Trade is [just] like interest." But Allah has permitted trade and has forbidden interest
Surah al-Baqarah (275)
Next, if the sales acquire consent between seller and buyer, then its ruling is permissible. Allah SWT says:
يَا أَيُّهَا الَّذِينَ آمَنُوا لَا تَأْكُلُوا أَمْوَالَكُم بَيْنَكُم بِالْبَاطِلِ إِلَّا أَن تَكُونَ تِجَارَةً عَن تَرَاضٍ مِّنكُمْ
“O you who have believed, do not consume one another's wealth unjustly but only [in lawful] business by mutual consent.”
Surah al-Nisa’ (29)
After analysing the above arguments, we can conclude here that the ruling of reselling an item/ product without the knowledge of the founder (main seller) is as the following:
- If the third party has bought the item and has full ownership of it, then the ruling is it is permissible for him to resell the item even without the knowledge of the founder.
- If the third party still not owns the item, then it is haram for him to resell it because he has no full ownership. This includes sales and purchases not in possession.
- If the item is a basic need like staple food and the third party bought all stocks in the market and hide it, then, for some period of time, he resells it with a higher price, then the ruling is haram because it is included under ihtikar which is prohibited by the Prophet PBUH.
However, we should not take others’ hardship as a chance to earn something because it is among taking others’ wealth unlawfully.