Question Summary:
Multi-level Marketing

Question Detail:

Asslamualikum, I want to ask a question about a business type, all the detail of that type of business can be seen in image given, the image can be accessed from the links:

Answer :

In the Name of Allaah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

The business outline detailed above is that of the pyramid scheme in the multi-level marketing network. Pyramid schemes in most cases are based on impermissible elements such as gambling, interest, ambiguity, deception and conditional sales. Hence, the transaction itself will be based on the contract. You have not provided enough details on the contract itself. You may send us the contract at admin@daruliftaa.net (ref. Muajul) and we will analyze further.

In principle, if a condition is laid out that the buyer of the commodity must find more customers, then this transaction is impermissible. If however this condition is not laid out, then it will be permissible to enter into such transactions, provided that an asset, which must be identified and halaal, is being sold and not only a membership to the network. Moreover, if the commodity is sold at an exorbitant price, the purpose being to enter the network, then too the transaction will be impermissible[i].

And Allaah Ta’aala Knows Best

Muajul I. Chowdhury

Student, Darul Iftaa

New York, USA

Checked and Approved by,
Mufti Ebrahim Desai.

[i] فقه البيوع (2/ 812)

إن كان بيع المنتج مشروطا بأن يدخل المشترى في شبكة التسويق، فهذا البيع فاسد، لاشتراط ما لا بقتضيه العقد.