Exchanging Old Jewellery for New Jewellery
Question
Asalam Alaikum.
I have a lengthy insight and concern regarding the rulings of sale of gold.
According to classiscal scholars you cannot do and exchange of old gold jewellery for new gold.
The customary practice in jewellers is to give the offer value in paper currency of the old gold and then deduct the difference in value when the client chooses a new gold item, e.g the client trades in the item for 100 dollar at a price in relation to the international gold price and chooses a new gold item of different weight perhaps which costs 800 dollars, the new item being bought includes the gold price plus the labour charges and profit etc of the jeweller.
The difference is then topped up by the client or if the other way round difference refunded to client
As per the responses i got from some scholars i was told you cannot simply deduct the values you have to hand over the cash first i. A seperate transaction.
But i also came across the view of Ibn Taymiyyah and some other scholars that gold that is made into/crafted into jewellery comes out of this ruling as it comes out of use as a currency due to its craftsmanship.
There are certain hardships and confusions i face when using the stricter ruling by the first group of scholars
1) Jewellery includes craftsmanship charges and certain other expenditures, and since its a traded commodity i ofcourse am entitled to profits in my business. These added charges have to be considered. Since they r considered anyways in a sale with paper money
2) the customary practice is if a client is simply taking cash they get a lower rate then if they will sell their old gold and buy new gold. If they do the latter we can offer them a better rate. But this is then linking the two transactions. However, this is in benefit to the client as if i buy at the same rate and not give the client a better rate if they purchase new gold with the ammount of the old gold then the customer will loose money/value. Since the deductions will be higher as if they r exchanging i dont need to charge profits on both the transactions. But if they sell for cash withoht buying new jewellery i need to deduct more so i can profit. If they buy new gold the jewellers can simply minus a small deduction to cater for melting charges and other minor losses. Or not deduct at all and only charge the labour on the new gold
Im my understanding the essence of riba is exploitation. But in this case following the stricter ruling and seperating the two transactions completely means i have to buy the old gold at the dame ammount regardless. But it also.means i am making more.profit where i dont need to at the expense of client.
3) it can cause significant competitive disadvantages to follow the stricter ruling due to its impracticality in tbe modern jewellery trade.
As most of my conpetition will give seperate rates, one for exchange and one for buying on cash, since they dont need to keep a higher profit on buying the old gold if the client is exchanging for new. Or sometimes my competitor shops will have offers where if a client is exchanging they can exchange with 100% value on old gold meaning gram for gram and then pay the labour charges on
top. Now even if i do offer a better rate for exchange as opposed to selling only, and then proceed to follow the traditional scholarly ruling of handing over the cash first, is it not still wrong since i have linked the two transactions
4) the trade of jewellery was im assuming a halal means of income at the time of the Prophet SAW. Thus means that jewellers would take payment in the currency at the time which would.be more practical.to use gold over silver. But the jewellers also have to charge craftsmanship and labour
5) gold is no longer used as a currency and has been replaced. As we no longer use dinar and dirham (gold and silver), and based on thus even when i takenin old gold jewellery i cannot use it until melted and sold as scrap
6) if the client certainly wants to buy new gold with the value of the old gold. Then handing over the paper money would seem as an unnesecary and impractical step as after a moment the client would simply hand it back to purchase new gold. Based on this logic and the consideration of other charges that come jnto jewellery due to its crafstmanship. Thus taking it out of a medium of exchange, wouldnt it be pracitcal to.simoly calculate the diffrnce in money on paper (ofcourse by calculating them as two transactions)
Based on all these challenges and confusions. As well as my logical appeal, may I follow the Fatwa of Ibn Taymiyya and his student Al Qayim and others. That gold when made into Jewellery does not fall under the same restrictions of trade as if it were in the form of currency.
As following the stricter interpretation causes hardship and is simply impractical and not understood by clients
If not then what is the solution.
Please excuse my lengthy query but i really need your help. It is something causing me hreat anxiety but I am worried to be having haram income. But at
the same time following strict and literal interpretations is problematic to my business.
Please can you also clarify regarding anything i should look out for when selling gold jewellery over the phone or online. Considering that once payment is through the transaction is complete. And even though they are logistical complications and the client may not have the item physically. They are still in construcitve possession of the item as it is immediately allocated under their name
Answer
As salām ʿalaikum wa raḥmatullāhī wa barakātuhu
In the Name of Allāh, the Most Gracious, the Most Merciful.
Your detailed query has been noted. Your concern for a Ḥalāl income is commendable and is a sign of true Īmān. At the same time, it is important to understand the severity of the issue which you have raised, as it relates directly to Ribā, which is treated with the utmost severity in the Sharīʿah.
The rulings of Ribā in gold and silver are based on divine rulings found in the Holy Qur’ān, and followed by the Fuqahāʾ across the four Madhāhib who have maintained a clear and consistent position, which is:“When gold is exchanged for gold, equality is mandatory, and any excess constitutes Ribā”
Accordingly, the common exchange practice which you have described, where the value of old gold is simply deducted from the price of the new gold item, does not fulfil the Sharʿī requirements, because in reality it is a gold-for-gold transaction with unequal amounts of gold on either side.
Answers to the objections you have raised regarding this view:
1. Craftsmanship and profit
The issue you are faced with is not the pricing of your gold jewellery, but rather it is the method of exchanging or selling this jewellery. If your gold jewellery is sold for cash, you may put whatever price you like for your craftsmanship and as your profit, however, when gold is exchanged for gold, the Sharīʿah does not permit adding value through indirect pricing structures. The presence of labour cost does not change the ruling of Ribā when the underlying exchange remains gold-for-gold.
2. Tying one transaction to another
Offering a better price to someone who is exchanging their gold, compared to someone who is just buying from you is permitted, provided that both transactions are kept completely separate.
In other words, one deal must not depend on the other. The second transaction should not be “on hold” or waiting for the first one to be approved. If they are linked in that way, then it would be seen as combining two transactions, which is not permissible.
It should be done in the following manner:
- First you buy their jewellery in exchange of cash as a fully independent transaction.
- Thereafter, you sell your item to them at a discounted price as a completely new and separate transaction without any compulsion on the client. The reasoning behind the discount doesn’t affect the permissibility of the transaction.
3. Your method benefits the customer and avoids exploitation
Ribā is not only defined by exploitation. Even a mutually agreed upon arrangement which outwardly seems beneficial for both can be Ribā if it is not structured in the correct manner. Adjusting your profit to help the customer does not make the transaction permissible if the basic setup is wrong.
4. Competitive disadvantage and market practice
A widespread practice in the market does not determine permissibility. Rasūlullāh ﷺ warned that a time will come when Ribā becomes widespread, and this will be the time when caution is required.
Loss of competitiveness or profit might be difficult, but it is not a valid justification to engage in a doubtful or impermissible practice. Barakah lies in compliance with the laws of Sharīʿah, not in matching the market.
5. Practice in the time of the Prophet ﷺ
Jewellers did exist, but the rules of Ribā were strictly adhered to. When gold was exchanged for gold, it was done hand-to-hand and in equal quantities. Labour charges were taken by selling gold in exchange of silver coins, or silver in exchange of gold coins, or by using other permissible means.
6. Gold is no longer currency
This does not affect the ruling. The effective cause (ʿillah) in Ribā rulings is Thamaniyyah i.e., being a measure of value, which still applies to gold today and forever. It remains an item of Ribā regardless of whether it is currently used as circulating currency or not.
7. Handing over cash seems like a mere formality
This is not a mere formality. It is a Sharʿī requirement to separate two distinct contracts. Take note of the following Ḥadīth:
جاء بلال إلى النبي صلى الله عليه وسلم بتمر برني، فقال له النبي صلى الله عليه وسلم: (من أين هذا). قال بلال: كان عندنا تمر ردي، فبعت منه صاعين بصاع، لنطعم النبي صلى الله عليه وسلم، فقال النبي صلى الله عليه وسلم عند ذلك: (أوه أوه، عين الربا عين الربا، لا تفعل، ولكن إذا أردت أن تشتري فبع التمر ببيع آخر، ثم اشتر به).
Translation: Once Bilal رضي الله عنه brought Barnī dates to the Prophet ﷺ and the Prophet ﷺ asked him, “From where have you brought these?” Bilal t replied, “I had some inferior type of dates and exchanged two Ṣāʿ of it for one Ṣāʿ of Barnī dates in order to give it to the Prophetﷺ to eat.” Thereupon the Prophet ﷺ said, “Beware! Beware! This is exact Ribā! This is exact Ribā! Don’t do so, but if you want to buy (a superior kind of dates) sell the inferior dates for money and then buy the superior kind of dates with that money.”
The problems with the view of Ibn Taymiyyah رحمه الله is:
- Gold always retains an element of currency due to the intrinsic value it holds, its demand, and its universal recognition. These factors remain, even when the gold is crafted into jewellery which is often termed as “wearable wealth,” serving as a tangible, highly liquid, and universally accepted store of value that can be easily converted back into cash or currency around the world.
This fact alone is sufficient to refute the view of Ibn Taymiyyah رحمه الله and prove that the rulings of currency will always apply to gold, no matter its form.
- The view of Ibn-Taymiyyah رحمه الله opposes the position of the overwhelming majority of classical scholars.
- No one from the four Madhāhib adopted this opinion as the relied-upon ruling.
- In matters of Ribā, due to its severity, we cannot adopt a lenient minority view, especially when such a view opens the door to that which is clearly prohibited in Sharīʿah.
Therefore, it is not permissible to resort to this opinion merely due to difficulty, market pressure, or convenience.
Lastly, trying to find a way around this ruling is not the solution. The solution is to adjust the business model to fit within Sharīʿah, not to adjust the Sharīʿah to fit the business. The method explained above could be adopted as an alternate permissible manner of trading.
May Allah ﷻ grant you Barakah in your business, protect you from any form of Ribā, and replace any difficulty you face with something far better. Āmīn.
And Allāh Taʿālā knows best.
References (Arabic / Urdu sources)
السنن الكبرى – أبو بكر أحمد بن الحسين بن علي البيهقي (ت 458 هـ) 5/ 477 ط العلمية
– وأخبرنا أبو الحسين بن بشران العدل، ببغداد، أنا إسماعيل بن محمد الصفار، ثنا يحيى بن جعفر، أنا عبد الوهاب هو ابن عطاء، أنا سعيد هو ابن أبي عروبة، عن دينار أبي فاطمة، عن أبي رافع، قال: كان عمر بن الخطاب يجلس عندي فيعلمني الآية فأنساها فأناديه يا أمير المؤمنين، قد نسيتها فيرجع فيعلمنيها، قال: فقلت له: إني أصوغ الذهب فأبيعه بوزنه وآخذ لعمالة يدي أجرا، قال: لا تبع الذهب بالذهب إلا وزنا بوزن، والفضة بالفضة إلا وزنا بوزن، ولا تأخذ فضلا
النتف في الفتاوى للسغدي — أبو الحسن علي بن الحسين بن محمد السُّغْدي، (ت 461 هـ) 1/492
واذا كان مع احد الجنسين عرض مثل الخانم فيه قص والمنطقة فيها سير فاذا اشترى خاتما فيه فص فانه لا يجوز في ذلك ستة اشياء
احدهما ان تكون الفضة اقل من فضة الخاتم، والثاني ان تكون مثل فضة الخاتم لان الفص يكون فيه ربا، والثالث الجهالة ان لا يعلم افضة الخاتم اكثر ام الفضة الاخرى، والرابع الخيار فيه لا يجوز، والخامس النسيئة فيه لا تجوز، والسادس الافتراق قبل القبض لا يجوز
فتاوی قاسمیہ — حضرت مولانا مفتی شبیر احمد القاسمی ۔ 19/ 579
کردا کاٹ کر چاندی کو چاندی کے بدلہ میں یا سونے کو سونے کے بدلہ میں لین دین کرنا کمی زیادتی کے ساتھ جائز نہیں ہے؛ البتہ اگر کردا کاٹ کر لینے میں عوض میں روپئے دیا جائے اور دینے میں روپئے لیا جائے تو جائز ہو سکتا ہے۔
بدائع الصنائع في ترتيب الشرائع — علاء الدين، أبو بكر بن مسعود بن أحمد الكاساني الحنفي (ت ٥٨٧هـ) 2/ 20
وجه قولهما أن القيمة في الذهب والفضة ساقطة الاعتبار شرعا؛ لأن سائر الأشياء تقوم بهما وإنما المعتبر فيهما الوزن ألا ترى أن من ملك إبريق فضة وزنه مائة وخمسون درهما وقيمته مائتا درهم لا تجب الزكاة؟ . وكذلك إذا ملك آنية ذهب وزنها عشرة مثاقيل وقيمتها مائتا درهم لا تجب الزكاة. ولو كانت القيمة فيها معتبرة لوجبت
الاختيار لتعليل المختار — عبد الله بن محمود بن مودود الموصلي الحنفي (ت 683 هـ) 2/ 39
وفي الشريعة: بيع الأثمان بعضها ببعض، سمي به لوجوب دفع ما في يد كل واحد من المتعاقدين إلى صاحبه في المجل
قال: (وهو بيع جنس الأثمان بعضه ببعض، ويستوي في ذلك مضروبهما ومصوغهما وتبرهما، فإن باع فضة بفضة أو ذهبا بذهب لم يجز إلا مثلا بمثل يدا بيد)
فتاوی دار العلوم زکریا — حضرت مولانا مفتی رضاء الحق صاحب دامت برکاتہم ۔ 5/341
سوال: زید کے پاس ۲۲ کیرٹ کا ۵ تولہ سونے کا پراناز یور موجود ہے، وہ سنار کے پاس گیا اور اس سے کہا کہ مجھے فلاں ڈزائن کا نیاز پور ۵ تولہ سونے کا چاہنے سنار نے کہا آپ اپنے زیور کے ساتھ تین ہزار ر ہند مزید ادا کریں گے، کیا یہ معاملہ جائز ہے یا نہیں؟
الجواب: یہ معاملہ سودی ہے اور نا جائز ہے، ہاں گا ہک اپناز اور پچاس ہزار میں مثلاً فروخت کر دے اور ترپن ہزار سے نئے ڈزائن کا زیور خرید لے تو یہ معاملہ جائز اور درست ہو گا۔
المبسوط للسرخسي — محمد بن أحمد بن أبي سهل شمس الأئمة السرخسي (ت ٤٨٣ هـ) 14/ 4
ومن ذلك حديث أنس بن مالك رضي الله عنه قال: أتي عمر بن الخطاب رضي الله عنه بإناء خسرواني قد أحكمت صنعته فبعثني به لأبيعه فأعطيت به وزنه وزيادة، فذكرت ذلك لعمر رضي الله عنه فقال: أما الزيادة، فلا. وهذا الإناء كان من ذهب أو فضة
وفيه دليل على أنه لا قيمة للصنعة في الذهب والفضة عند المقابلة بجنسها؛ لأنه لا يجوز الاعتياض عنها، وما كان مالا متقوما شرعا فالاعتياض عنه جائز فعرفنا أنه إنما لم يجوز؛ لأنه لا قيمة للصنعة في هذه الحالة شرعا كما لا قيمة للصنعة في المعازف، والملاهي شرعا، وفيه دليل أن الذهب، والفضة بالصنعة لا تخرج من أن تكون وزنية، وإن اعتاد الناس بيعها بغير وزن بخلاف سائر الموزونات؛ لأن صنعة الوزن فيها ثابتة بالنص، فلا تتغير بالعرف بخلاف سائر الأشياء،
صحيح البخاري — محمد بن إسماعيل بن إبراهيم بن المغيرة البخاري، أبو عبد الله (ت 256 هـ) 2/813
– حدثنا إسحاق: حدثنا يحيى بن صالح: حدثنا معاوية، هو ابن سلام، عن يحيى قال: سمعت عقبة بن عبد الغافر: أنه سمع أبا سعيد الخدري رضي الله عنه قال: جاء بلال إلى النبي صلى الله عليه وسلم بتمر برني، فقال له النبي صلى الله عليه وسلم: (من أين هذا). قال بلال: كان عندنا تمر ردي، فبعت منه صاعين بصاع، لنطعم النبي صلى الله عليه وسلم، فقال النبي صلى الله عليه وسلم عند ذلك: (أوه أوه، عين الربا عين الربا، لا تفعل، ولكن إذا أردت أن تشتري فبع التمر ببيع آخر، ثم اشتر به).
فقه البيوع — مفتي محمد تقي عثماني حفظه الله – 2/ 673
أما إن كان الذهب والفضة مَصُوغَيْن، مثل: الحلي والأواني المصوغة من الذهب والفضة، فالجمهور على أنه صرف، وهو في حكم التبر والمسكوك سواء بسواء، فيجب التماثل والتقابض إذا بيعَ حُلِيُّ الذهب بتبره، أو بالدينار الذهبي، أو بحلي آخر، ويجب التقابض إذا بيع بخلاف جنسه؛ وهو المختار في المذاهب الأربعة وعند جماهير العلماء، وحكي عن الإمام مالك الان جواز بيع المضروب بقيمته من جنسه، وأنكر أصحابه ذلك ونفوه عنه، وحكي عن الإمام أحمد أنه قال: لا يجوز بيع الصحاح بالمكسرة أصلاً، لأن للصناعة قيمة بدليل حالة الإتلاف، فيصير كأنه ضم قيمة الصناعة إلى الذهب، ولكن المختار في مذهب المالكية والحنابلة ما ذكرنا من أنه يجوز بيعه بشرط التساوي في الوزن والتقابض، ولا يجوز بالتفاضل أو بدون التقابض
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