Questionable marketing practices

10-6-2004 | IslamWeb

Question:

The Xianle Company of China started business in many countries including Pakistan. They call it direct marketing or MLM System. In that you purchased an EPM (electronic pulse massager) machine in Rs. 9000. And they make you a member (distributor) for that. Then you should introduce two persons. Each spends 9000 Rs and you get about Rs 3000 from each of them as your share. Then each of them introduce two persons and this goes on in a net and you continue to get share on each introduction. In a short period you start getting a huge income. Is this type of income is right or ‘Halal? Please answer me as soon as possible.

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Answer:

Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.

It is not allowed to work with this company in order to gain profits by advertising the EPM. The reason is that most of those who deal with this company do not need the equipment, rather they want to gain profits by increasing the number of customers. Sometimes they might find customers and get the similar amount they have spent or more, or they may not find the amount they have spent. This is a kind of gambling. Such transactions are based on risk and luck where one may get profit or loss; the goods that are used only as means does not have any weight in the transactions. The evidence for what we cited is that if the company does not pay the amount as mentioned in your question, people rarely would purchase it in the given price. However, if one is in real need of such equipment it is permissible for him to purchase it without having enrolled in that policy.Enrolling in that scheme, bringing customers and advertising it is cooperation with it, which is forbidden. Allah says: "Do not help one another in sin and transgression." (Al-Ma'idah 5:2)

This transaction does not include Riba but it is gambling as mentioned.

Allah knows best.