Internet auction sales

09/01/2011| IslamWeb

Question:

Dear sir, Assalamu Alaikum on internet there is a site where one can buy things relatively cheap by a sort of bidding. it works like this: first , one buys some bidding tocken , each costing about 50 cents, and then on a selected item he starts bidding.initial item prices are very cheap, and each bid is only one or two cent increase over the initial price. but since many bidders are actually giving the host company 50 cents (price of bidding tocken, used one per bid) with each bid therefore host company is never in loss. the bidder who bids highest gets the thing with the bidded price (plus the price of many bidding tockens he used ), and the rest of the bidders lose there money which they used with each bidding tocken. i want to ask whether it is halal or haram. thanking you in anticipation for your guidence Allah hafiz and best regards Ahnaf usman

  

Fatwa:

 

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.

 

Sale by auction is permissible, and this is supported by the Hadeeth in which the Prophet offered an item for sale. A man said, "I will buy it for one dirham", and the Prophet said: "Who bids more than one dirham? Who bids more than one dirham?" When another man offered two dirhams, the Prophet sold him the item. [Ahmad, Abu Daawood and others]

 

The method mentioned in the question, however, is forbidden and it does not fall under the lawful auction sale, since the money is paid for subscription, not for obtaining information. Moreover, the paid money is not returned to the person who is not the highest bidder, and this is a sort of gambling because the sale involves inevitable loss for potential gain. Indeed, this is the essence of gambling. In the resolution of the Islamic Fiqh Academy, when listing the conditions of the permissibility of sale by auction, it is stated: "Requiring a deposit from those wishing to enter the auction sale is permissible. The deposit must be returned to all the bidders who did not win the auction and it must be deducted from the selling price for the highest bidder."

 

Moreover, it should be noted that sale on the internet is permissible on condition that it meets the sale's requirements and conditions. The sale's requirements include offer and acceptance between the seller and the buyer on the item to be sold for the price suggested. The conditions are: the item should be lawful, pure, of benefit and possessed by the seller who is able to deliver it to the buyer. The item should be known by seeing it, or fully describing it in a manner that shows its quantity, type and other features, which leave no room for uncertainty.

 

Allah Knows best.

 

Fatwa answered by: The Fatwa Center at Islamweb