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What are the basic principles and limits with regard to doing business? What I mean is that I now have competitors, and some of them are watching out and constantly spying on their competitors, and some of them crush their competitors on the grounds that there is no mercy in business, or “If I don’t do that to him he will do it to me.” What am I allowed to do with my competitors? When it comes to dealing with customers, for example, for the purpose of encouraging customers to buy from me, do I have the right to bring some individuals and pay them to advise my customers to buy my products, when the people think that they are just customers but they are not; they are only there for the purpose of bringing people to find out about my products, concerning which I will never cheat – what is the ruling on that? Am I obliged, for example, to tell my customers the sources of the components of my products, which may be expected as part of being honest? It is well known that this comes under the heading of trade secrets. How can I be an honest businessman in the face of the many dubious practices that occur when dealing with people, both customers and competitors? Is there any advice, with sources of information, that could serve as a reference for businessmen on a daily basis?
Praise be to Allah.
The businessman should develop a number of good characteristics and good manners and attitudes, so that Allah may bless him in his business and his provision.
These characteristics include the following:
{[Are] men whom neither commerce nor sale distracts from the remembrance of Allah and performance of prayer and giving of zakah. They fear a Day in which the hearts and eyes will [fearfully] turn about, That Allah may reward them [According to] the best of what they did and increase them from His bounty. And Allah gives provision to whom He wills without account.} [An-Nur 24:37, 38]
{O you who have believed, do not consume one another's wealth unjustly.} [An-Nisa’ 4:29]
It was narrated from Isma`il ibn `Ubayd ibn Rifa`ah, from his father, from his grandfather, that he went out to the prayer place with the Prophet (blessings and peace of Allah be upon him). He saw the people buying and selling , so he said: “O merchants!” They responded to the Messenger of Allah (blessings and peace of Allah be upon him), looking up and craning their necks to see him. He said, “Indeed the merchants will be raised on the Day of Resurrection as evildoers, apart from those who fear Allah and are sincere and honest .” (Narrated by At-Tirmidhi, 1210 and Ibn Majah, 2146; classed as authentic by Al-Albani in Sahih At-Targhib, 1785)
With regard to spying on other businessmen, intending harm to one’s competitors and saying that there is no mercy in business, all of that is prohibited and is not befitting for a Muslim businessman. Spying on people isprohibited, and intending to cause harm to another Muslim is prohibited. The Muslim should love for his brother what he loves for himself, and hate for him what he hates for himself.
It is soundly narrated that the Prophet (blessings and peace of Allah be upon him) said: “There should be neither harming nor reciprocating harm.” (Narrated by Ibn Majah, 2340; classed as authentic by Al-Albani in Sahih Ibn Majah)
Ash-Shawkani (may Allah have mercy on him) said:
This indicates that it is forbidden to cause harm of any kind. Therefore it is not permissible to cause harm in any form, unless there is evidence to indicate that something is excluded from the general meaning of this Hadith." (Nayl Al-Awtar 5/311)
Al-Bukhari (13), Muslim (45) and An-Nasa’i (5017) narrated from Anas (may Allah be pleased with him) that the Messenger of Allah (blessings and peace of Allah be upon him) said: “By the One in Whose hand is the soul of Muhammad, no one of you truly believes until he loves for his brother what he loves for himself of good.”
Al-Hafidh (may Allah have mercy on him) said:
“Al-Karmani said: It is also part of faith to hate for one’s brother what one hates oneself of troubles and problems.”
It is also not permissible to think ill of the Muslims. So no businessman should say of his fellow businessman, “If I don’t do such and such to him, he will do it to me.” Rather he should think positively of him, and not respond to bad treatment in like manner, but pardon and overlook instead, as was the attitude of the Prophet (blessings and peace of Allah be upon him).
Competition between businessmen should be noble and based on sincerity, brotherhood and love. The businessman should take steps to prevent himself from developing grudges and refrain from wrongdoing and consuming people’s wealth unlawfully, and he should avoid stinginess, miserliness and covetousness that is based on avarice and greed. He should engage with the market on the basis of supply and demand, and not hoard products or wrong anyone in any way.
Dealing with customers must be based on honesty, and should not be based on deceiving, cheating and wronging them. The fact that you are hiring people to mix with the customers and advise them to buy items from you, so that the buyers think that these people are customers like them, is not permissible, because it comes under the heading of deceiving, lying and cheating, which are all prohibited according to the religion of Allah, and because it is the opposite of the characteristics that the Muslim businessman should have, namely honesty and sincerity.
What appears to be the case – and Allah knows best – is that this is a form of artificially inflating prices, which is prohibited.
An-Nawawi (may Allah have mercy on him) said: “Artificially inflating prices” means adding to the price of an item that is being auctioned in the marketplace and the like, not out of a desire to purchase it, but to deceive others. This is prohibited."(Riyadh As-Salihin 174).
What the seller is doing in this case is not dissimilar to what the one who artificially inflates prices does, thus deceiving would-be purchasers.
The Muslim trader fears Allah, shows sincerity towards people, strives to be honest, brings useful products of good quality, and strives to develop noble characteristics. This and similar factors are what will attract customers to him and benefit him in his business, for he will become known in the markets as a honest and trustworthy businessman, so people will come to him from all over, and Allah will endear him to people and decree that he be accepted as a decent, trustworthy, honest Muslim businessman who has a good attitude, treats people well, and is friendly and compassionate.
You are not obliged to tell customers about the sources of the components of your products. If any customer asks you about that, you have two options: either tell him the truth, or apologise to him and say that you cannot answer that question.
However, it is not permissible for you to tell him anything except the truth.
We advise you to read the following books:
And Allah knows best.