- The hadith is explicit that no ceiling is set for profit in buying and selling; it is subject to the market forces of supply and demand. Thus ʿUrwah earned a one-hundred-percent return on his transaction, and the Prophet ﷺ voiced no objection.
The Fatwā Committee of the Department of Scholarly Research has stated: “The basic ruling regarding prices is that they are not fixed, whether the sale is spot or deferred; they are left to be determined by supply and demand. Even so, people should show mercy to one another and let a spirit of generosity prevail in their dealings, for the Prophet ﷺ said, ‘May Allah have mercy on a servant who is gracious when he sells and gracious when he buys.’”
Resolution of the Islamic Fiqh Academy on the Regulation of Profits:
The Council of the Islamic Fiqh Academy, convened in its fifth session in Kuwait from 1–6 Jumādā al-Awwal 1409 AH / 10–15 December 1988 CE, after reviewing the papers submitted by members and experts on the question of fixing merchants’ profits and after listening to the related discussions, resolved the following:
First: The texts and legal maxims of the Sharia establish the principle that people are to be left free in their buying and selling and in the disposal of their property and wealth, within the parameters and regulations of noble Islamic law, in accordance with the unrestricted words of Allah Most High: “O you who believe, do not consume one another’s wealth wrongfully; rather, let there be trade by mutual consent among you” (Q. 4:29).
Second: No specific percentage of profit is imposed on merchants in their transactions. This matter is left to the general conditions of commerce, to the circumstances of the trader and the goods, while observing the ethical standards prescribed by the Sharia—gentleness, contentment, generosity, and ease.