Question Summary:
Please could you advise whether there is anything here that contradicts the Shar’ee principles. I would appreciate a detailed response

Question Detail:

I would like to know the shar’ee position on a business scheme.

This is how the business operates:
Membership is free, and once a person joins the business, he is provided with a number of websites with an ID number that is exclusive to him. These websites feature different products that are of high quality and available at a reasonable price. A few of these websites advertise the business opportunity itself, encouraging individuals to join and become an affiliate of the company. All the transactions and admin and handling costs are taken care of by the company. All a member is required to do is to advertise the websites and refer as many people as possible to these websites. Thus the member is eligible for a commission on each of the products that is sold through his website.
The member can also order products and physically sell them from his home.

This is one aspect of the business.
The second is what is referred to as the ‘network plan’. Basically people already affiliated with the business [through the above-mentioned method] can upgrade their status and join the network plan. This is done by collection of a number of points [say 20 a month, for example, coming to around 15 gbp]. There are many ways to collect these points: for instance, 1] buying a product yourself; 2] selling a product/s through a referral from the website or physically; 3] buying an independent website from the company for more efficient sales; 4] buying monthly membership of company-run information website which has much to offer by way of efficient running of home business etc. In short there is a monthly requirement of making some kind of a sale to join the N Plan.
By joining this plan one is able to benefit from not only ones own referrals but the commission from referrals from those referred by one too, and this runs many levels down. [This can go down to infinity]. In some companies, affiliates are placed under a new member of N Plan as soon as he joins. This is done for the purpose of encouragement. The system has been made such that after a given number of affiliates, the others will automatically end up under the affiliates already referred by you., so that both you and the new affiliate referred by you can benefit, as both of you will get a share if the new affiliate makes sales, etc.
 
They call the N Plan as leveraged income or residual income. Leveraged is where you enjoy the fruit of others and residual is where you work once and reap forever.

In addition to above there are many kinds of different bonuses an affiliate can benefit from. All provided by the company to encourage the individual in the N Plan.

Please could you advise whether there is anything here that contradicts the Shar’ee principles. I would appreciate a detailed response.

Answer :

In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatoh
We have studied the scheme and make the following comments
 
There are three aspects to the scheme
 

 
The purpose of this scheme is to promote products and services and entice clients by offering a rewards programme or club benefits. The initial membership entitles you to be registered with the scheme whereby if you purchase or recommend someone to purchase any product, you will be rewarded by gaining points into your membership account. The more points are accumulated, the member becomes entitled to more rewards and benefits.
Therefore, it will be permissible for you to subscribe as a member to this scheme on condition they do not deal in Haraam products. The club points or N plan facility upgrade that you receive from the scheme is considered as a voluntary commission and therefore it will be permissible for you to use and take benefit of these points.
And Allah knows best
Wassalam
Muhammed Zakariyya Desai,
Checked and Approved by:
Mufti Ebrahim Desai
Darul Iftaa, Madrassah In'aamiyyah