QUESTION
Assalamualaikum. Some shops or supermarkets offer paid discount cards, with the payment either made once at the beginning of the subscription or regularly, whether annually or monthly. Is the use of such discount cards permissible?
ANSWER
The ruling on issuing and using paid discount cards is that it is permissible (جواز), provided that the fee charged is minimal and not intended for profit from the issuance of the card. Customers must also be informed of the terms, conditions, and validity period. Additionally, the card must not contain any gambling elements and must not offer any benefits that are non-compliant with Shariah principles.
EXPLANATION
A discount card is a product offered by certain businesses and companies that allows its holder to enjoy different types of benefits when purchasing items at designated outlets. It is one of the ways to market products more widely and attract more regular customers to conduct transactions at the business premises. A discount card does not necessarily have to be in the form of a physical card. There are various forms, such as membership subscriptions and monthly subscriptions that give discount benefits.
Discount cards available in the market can be categorised into several types:
1. Discount cards are given by the seller for free or after reaching a certain purchase threshold. For example:
- Ali registers as a member at Pharmacy A for free, providing a 5% discount on every future purchase by simply providing his phone number.
- Ali receives a discount card from Supermarket A for free because he spent more than RM300 at the supermarket.
This type of discount card is permissible (جواز), as it is considered a promise by the seller to grant the customer a gift (هبة) in the form of a discount.
2. Discount cards that the seller offers for a fee, whether paid once or regularly (monthly or annually). For example:
- Ali registers as a member at Bookstore A with a registration fee of RM15. By becoming a member, Ali receives a 10% discount on every purchase at the bookstore.
- Ali subscribes to a membership at an online store for RM5 monthly. The membership provides discount benefits for all or selected items available in the store.
3. Discount cards provided by third parties for a fee that offer discount benefits for purchases at selected premises. For example:
- Ali subscribes to a discount card from Travel Company A for RM200 per year, which discounts purchases at selected hotels and airlines.
However, the ruling on using paid discount cards, such as the second and third types, has become a matter of scholarly disagreement among contemporary scholars and fatwa councils. This is due to several Shariah-related concerns in the use of paid discount cards, such as the issues of uncertainty (غرر) and gambling (ميسر). One of the fundamental principles in Islamic transactions is the prohibition of gharar-based sales, as mentioned in a hadith narrated by Abu Hurairah RA:
نَهَى رَسُولُ اللَّهِ صلى الله عليه وسلم عَنْ بَيْعِ الْحَصَاةِ وَعَنْ بَيْعِ الْغَرَرِ
Meaning: "Allah’s messenger SAW forbade a transaction determined by throwing stones, and the type that involves some uncertainty."
(Narrated by Muslim)
The details regarding the definition and ruling of gharar in buying and selling have been explained in the following articles:
- Irsyad Hukum Series 705: The Ruling on Scoop Sales
- Irsyad Hukum Series 762: The Ruling on Buffet Meal Sales
The Ruling on Paid Discount Cards
According to the Fatwa Department of the Hashemite Kingdom of Jordan, a discount card obtained by paying more than the cost of producing the physical plastic card or through an annual fee is deemed haram, whether issued by a seller or a third party.
The Islamic Fiqh Academy under the Muslim World League and the Permanent Committee for Islamic Research and Fatwa in Saudi Arabia have also issued fatwas declaring the use of paid discount cards issued by third parties as prohibited (حرام). However, they do not specifically address discount cards issued directly by sellers.
The following are among the arguments put forward by those who deem it prohibited (حرام):
- Discount cards contain uncertainty because the return or benefit (i.e., the discount) received by the customer in exchange for the payment is uncertain.
- They contain gambling elements, as the seller is guaranteed a profit, while the buyer faces the possibility of gain or loss depending on the purchases made.
- There are also elements of deception, where the seller does not provide genuine benefits to the buyer, for example, by increasing the price to make it appear as if a discount is being given, while in reality, the buyer only pays the original price.
However, the Fatwa Department of the Hashemite Kingdom of Jordan adds that if the discount card is paid for, but the payment only covers the actual cost of producing and issuing the card without any profit being made. It falls into the category of doubtful matters (شبهة) and is an area open to discussion. Nevertheless, it is better to avoid it as a precautionary measure.
Meanwhile, Sheikh Yusuf bin Abdullah al-Shubaili stated that a discount card subscription that requires a fixed monthly or annual fee is prohibited (حرام). Nevertheless, if the fee is used to cover the actual cost of producing the card, such as administrative and marketing expenses, it is permissible (جائز). Furthermore, if the fee paid is used to fund the rewards or benefits given to customers, it is prohibited (حرام) because it involves elements of uncertainty.
Based on this statement, the element of uncertainty can be eliminated if the fee paid by the discount cardholder represents the actual cost incurred by the issuing company. This actual cost includes administrative expenses, such as database system maintenance and related services. In this case, the payment made by the customer must be clearly defined and free from ambiguity.
The same view was also expressed by the JAKIM Muamalat Expert Panel Meeting, which convened on 4 April 2017, and made the following decisions:
- The use of discount cards/membership cards/loyalty cards is based on the concept of fee (أجرة) for the service provided.
- The permissibility of using these cards must adhere to the following conditions:
- If there is a fee charged, it must be at a minimum rate.
- There should be no gambling elements, such as prizes from lucky draws, taken from the card issuance fee.
- Clear terms and conditions.
- A clear validity period.
- No profit should be generated from the issuance of the card.
- It should not provide benefits that are Shariah-non-compliant.
The ruling on discount cards, membership cards, and loyalty cards that are issued for free is permissible based on the concept of voluntary donation (تبرعات).
CONCLUSION
The ruling on the issuance and use of paid discount cards is permissible (جواز), provided that the fee charged is at a minimum rate without generating profit from the card's issuance, and the customer is clearly informed of the terms, conditions, and validity period. The card must not contain any gambling elements and must not offer any benefits that are non-compliant with Shariah.