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Retaining Ownership of an Item After the Buyer Has Taken Possession of it

6829 – 0182

Asalaamu Alaikum

The following wording appears on our companys invoice. I would like to find out if it is shariah compliant :

”Ownership of goods sold shall remain with the Seller pending payment in full .But the risk of the goods passes to the customer on delivery .All returned goods ordered incorrectly will be subject to handling charges.”

The intent of this clause is to protect the seller in the event where goods are delivered but the customer fails to pay for them.Thus allowing the seller to take his goods back if the payment does not go through.

Please keep in mind ,that the failure to pay as referred to above , could occur in credit sale transactions as well as cash sale transactions (In the event of  a  cash sale , the EFT doesn’t go through or some similar mishap occurs with the payment , but the goods are already delivered )

As salām ʿalaikum wa raḥmatullāhī wa barakātuhu

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

A sale between two parties is enacted with offer and acceptance, and is complete by the buyer taking possession of the item. The clause of the item remaining the ownership of the seller until payment is complete is not a valid clause according to Sharīʿah and should be removed or revised in the contract.

Similarly, a clause imposing a handling fee for the return of goods is not permissible. In the case of a return, it is obligatory to refund the full purchase price. However, it is permissible to charge for delivery costs incurred as a result of returning the item.

And Allāh Taʿālā knows best.