Prohibitions on trading in Islam

One, Don't sell haram goods.

Selling haram goods is clearly not permitted in Islam, and the Prophet never did that either. Therefore, stay away from trading in goods that are not clearly halal, such as liquor, cigarettes, statues and so on. The Prophet said: "The trade in khamr is forbidden" (HR. Bukhari). "Indeed, if Allah has forbidden a people to eat something, He will also have forbidden the proceeds from its sale." (HR Ahmad)

Two, don't force it.

This is a phenomenon that occurs quite often in our society, where farmers are forced to sell their crops to grain traders just because they owe them fertilizer previously. The Prophet's hadith states that sellers and buyers have the right to khiar, namely the opportunity to think while they are not separated. This is to suppress dishonesty.

Three, don't pretend to buy

A hadith narrated from Ibnu Umar R.A said, in fact Rasulullah SAW has prohibited buying and selling using the najshi method, namely pretending to pay a higher price so that other buyers will be deceived.

Four, transactions outside the market are prohibited

It was narrated from Ibnu Umar R.A. he said: "Indeed, Rasulullah S.A.W forbade holding merchandise before it arrived on the market. This is a statement from Ibn Numair. Meanwhile, according to other narrators, the Prophet S.A.W actually prohibited the purchase of merchandise before it was marketed."

Five, Do not hoard goods

It was narrated from Abdullah bin Mas'ud R.A. He said: From the Prophet SAW that the Apostle forbade holding back the purchase (hoarding) of merchandise. The issue of hoarding is a bit complicated, so various accusations are ultimately difficult to prove. The government panicked when the price of beef hit Rp 120,000 per kilogram. Feedlot operators were raided on suspicion of deliberately withholding their cattle from slaughter, even though the animals had not yet reached the necessary weight; the police were left empty-handed. Hoarding is the practice of purchasing goods in large quantities, storing them for a period, and releasing them only when prices have skyrocketed. It is an unjust act. Its consequences are manifold, including the disruption of market trading mechanisms, the display of selfishness, and the destruction of other merchants' livelihoods. It is narrated by Ma’mar bin Abdullah that the Messenger of Allah said: “No one hoards but a sinner.” (Reported by Muslim).

Six, Do not be a broker

The main difference between real traders and "brokers" is that "brokers" do not pay cash for merchandise and also do not mention the price when picking up the goods. This often happens in livestock. Belantik often brings the farmer's cows or goats to market without leaving any money behind. The new price will be decided later after the item is sold.

Narrated from Ibnu Abbas RA he said: Rasulullah S.A.W forbade middle people (become brokers?) to take the opportunity to buy merchandise to sell to village people. It was narrated from Anas bin Malik RA that he said: We are prohibited from selling merchandise to middle people (as brokers) to sell to village people, even if that person is their brother or father. In trading science they are called middlemen, but they do not behave in the sense of true traders.

Or, recently we heard about a system for selling goods using the dropshipping method. Here, someone sells a product to buyers (consumers) without buying the product first. The buyer is looked for first, and if there is already a buyer who has ordered and paid, then contact the official agent. Then the wholesaler will send the goods directly to the buyer's address in the name of our shop. The Prophet reminded us not to sell goods that do not belong to us, because this could harm other parties.

Hakim bin Hizam once asked Rasulullah sallallaahu'alaihi wa sallam: "O Rasulullah, there is someone who comes to me and asks me to sell him something that I don't have yet, by first buying it for him from the market?" The Messenger of Allah answered: "Do not sell something that you do not have" (HR Abu Daud, Ibn Majah, Tirmidhi and Nasai).

Seven, Pay in cash, don't go into debt

Delayed payments are so common in traditional trading, they call them “debts”. However, the situation sometimes goes too far. My studies with traders reveal just how many suffer losses—or even go bankrupt—because their receivables remain unpaid for months or years. This is often referred to as "defaulting" or "absconding with the money." For traders dealing in commodities like mangoes or coconuts—who often operate with limited capital—having tens or hundreds of millions in receivables go unpaid can destroy their businesses. This happens frequently.

In reality, this is not debt in the conventional sense. A standard loan involves a clear agreement to lend money for future repayment. In trade, however, what occurs is a delayed payment—often forced upon the seller by the buyer’s dominant position within the trading system and supply chain.

Islamic law regarding debt is very strict; dozens, perhaps hundreds, of Hadiths address this issue. In trade, debt would actually be unnecessary if every transaction were conducted on a cash basis—an immediate exchange of goods for money. A Hadith narrated by Usamah bin Zaid (may Allah be pleased with him) states, "Indeed, riba (usury) lies in the deferment of payment." The Prophet (peace be upon him) said, "Exchanging silver for gold constitutes riba unless the exchange takes place on the spot. Exchanging wheat for wheat is riba unless the exchange takes place on the spot. Exchanging dates for dates is also riba unless the exchange takes place on the spot."

The key point is that value changes due to the factor of time. One Hadith deserves special emphasis: "...indeed, the best among you is the one who is best in repaying debts."

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DO'S AND DON'TS IN TRADING AGRICULTURAL PRODUCE

Agricultural products possess unique characteristics that shape their own specific trading ethics. Unlike manufactured goods, agricultural commodities lack uniformity and are perishable. Consequently, managing their trade—from producer to end consumer, from muddy fields to spotless dining tables—presents a distinct challenge. Two aspects are involved here. The physical aspect encompasses harvesting, cleaning, sorting, packaging, storage, and transportation. Meanwhile, the financial-economic aspect involves the offering of goods, price negotiation, reaching agreements, payment, credit arrangements, and so forth.

All of this involves people. From upstream to downstream, numerous transactions and relationships take place. This chain involves, at the very least, farmers, laborers, transport providers, collectors, wholesalers, and consumers. These interactions constitute commercial dealings that require proper regulation. For instance, practices such as gharar (uncertainty/ambiguity), breach of promise, fraud, misinformation, delayed payments, and unpaid debts must be avoided.

Agricultural trade systems tend to be complex and costly due to the nature of how these products are concentrated and then distributed—unlike industrial goods, which follow a purely distributive marketing process. Factors driving up costs include the fact that agricultural products (especially food) are voluminous or bulky, leading to high transport expenses; supplies are small-scale and geographically dispersed; goods are perishable; and product characteristics vary based on specific geographical origins.

Trading to earn a livelihood must be approached with care; beyond involving many people, it entails making offers, skillfully reading situations, and navigating the potential for profit or loss. The following trading ethics are derived from teachings found—whether implicitly or explicitly—in scripture and Hadith, as well as from the direct example set by the Messenger of Allah (SAW).

First: Grounded in the motivation of worship

Fundamentally, all work must be undertaken with the intention of pleasing Allah (lillahi ta’ala). "Indeed, deeds are judged by intentions, and each person shall receive what they intended. Whoever migrates for the sake of Allah and His Messenger, their migration is for Allah and His Messenger; and whoever migrates for worldly gain or to marry a woman, their migration is for that which they intended." (Narrated by Al-Bukhari and Muslim).

Every job—and the contribution that job makes to the community's economic system—transcends mere financial gain. Every economic activity inherently contains a social dimension. The value of the goods we purchase often exceeds the price we pay for them. Consider, for instance, someone who is hungry during the workday while carrying out an important assignment for their employer: is a plate of rice and side dishes costing Rp 15,000 truly comparable to the successful completion of their task that day? That lunch, costing only fifteen thousand, might well have enabled them to secure a one-million-rupiah bonus from their company.

The Apostle has given an example. When he first started trading, he was only 12 years old. Rasul traded by following his uncle, Abdul Munthalib, to the land of Sham (Syria). When he was 15-17 years old, Rasul was trading independently, to the point that he became the leader of a group of traders. Until finally, his skills in trading attracted the attention of the rich widow Siti Khadijah. He also married Khadijah and his trading business became increasingly successful. Yes, that is the fruit of a sincere intention. Everything that is intended to seek Allah's approval will definitely make it easier.

Because trading is worship, don't abandon your main worship. Surah Al Jumu'ah verses 9 and 10 always remind us of this: "O you who believe, when you are called to perform prayer on Friday, then hurry to remember Allah and abandon buying and selling. This is better for you if you know. When the prayer has been performed, then scatter on the face of the earth; and seek the grace of Allah and remember Allah a lot so that you may be successful."

Two, be honest and open

The temptation to be dishonest is great in trading. So the Prophet warned: "Indeed, traders (businessmen) will be resurrected on the Day of Resurrection as criminals except those traders who fear Allah, do good and are honest." (HR Tirmidhi). Another hadith for example: "Traders are immoral". Among the companions there were those who asked: "O Messenger of Allah, hasn't Allah permitted buying and selling?" Rasulullah answered: "Yes, but they often lie in what they say, they also often swear but their oaths are false" (HR Ahmad).

However, when traders can be honest, that is the key to success. The Apostle has proven it. Rasul is increasingly known for his honesty when trading. He never reduces the measurements on the scales, always says what is true about the condition of the goods, whether there are advantages or disadvantages to the goods. In fact, Rasul often exaggerates the scales to please his consumers. For his honesty, he was awarded the nickname Al-Amin (ie someone who can be trusted).

The Koran emphasizes the importance of honesty in trading. "Perfect the measure and do not be among those who cause harm, and weigh with straight scales. And do not harm people in their rights and do not run rampant on this earth by causing mischief." (AsySyu'araa: 181-183). Other verses that are similar to this, for example, are Ar-Rahmaan verse 9, Al-an'aam verse 152, and Al-israa verse 35.

In line with this, don't make excessive promises and oaths. For example, praising its quality, durability, advantages, etc. Oaths are not good, especially if you swear falsely. Swearing something that you are not sure is true is clearly a lie that Allah hates. Narrated from Abu Hurairah, Rasulullah SAW said: "An oath sells merchandise, but it erases blessings."

In trading, Rasulullah SAW never committed fraud. Narrated from Abu Huraira RA: The Messenger of Allah once passed a pile of food, then he put his hand into it, then his hand touched something wet, so he asked, "What is this, O owner of the food?" The owner replied, "The food was exposed to rainwater, O Messenger of Allah." He said, "Why don't you put it in the food section so that people can see it? Know that whoever cheats is not from our group." (HR. Muslim). In another hadith, the Prophet said: "Whoever cheats, he is not among us. People who commit treason and deception, their place is in hell" (HR. Ibnu Hibban)

In this context, before the sale and purchase agreement is completed, carefully examine the goods to be purchased. Be careful before buying. As narrated by Abu Hurairah RA, Rasulullah S.A.W has prohibited two ways of buying and selling, namely mulamasah (the buyer only touches the item being sold without examining it) and munabazah (ie the buyer throws something at the item being sold without examining it).

Muzabanah is classified as an unclear sale and purchase. This means that merchandise cannot just be appraised, it must be weighed. We still frequently encounter this practice among pengijon—traders who purchase unhusked rice while the crop is still standing in the field, usually one or two weeks before the actual harvest. This practice ought to be stopped immediately.

Muzabanah—such as exchanging fresh dates for dried dates—is prohibited. Because it is difficult to accurately value the goods involved, barter is generally discouraged. A hadith recounts an instance involving the barter of high-quality dates for low-quality ones; the Prophet advised against this. If one wishes to acquire high-quality dates, one should first sell the low-quality ones and use the proceeds to purchase the better quality dates.

However, in one narration, barter is deemed permissible. As long as the commodities are of different types, a disparity in weight or volume is not an issue. Conversely, if the barter involves commodities of the same type, the exchange must be immediate (spot transaction) and the quantities equal; otherwise, it constitutes riba (usury). For example, bartering "Pandan Wangi" rice for a larger quantity of "Raskin" (subsidized) rice is permissible because the goods are of different types. However, bartering goods of the same type requires an immediate, equal exchange. And Allah knows best.

Third: Sell high-quality goods.

Another principle upheld by the Prophet in trade was maintaining the quality of the merchandise. He never sold defective goods, as doing so would disadvantage the buyer and potentially incur sin for the seller. It is narrated by Uqbah bin Amir (RA) that he heard the Prophet say: "A Muslim is the brother of another Muslim; it is not lawful for a Muslim to sell defective goods to his fellow Muslim without disclosing the defect" (Narrated by Ibn Majah).

At the same time, disparaging the merchandise of others is also prohibited. When engaging in trade, one should conduct business properly and in accordance with religious law. There is no need to badmouth others' goods simply to drive all consumers toward oneself. This is considered a sin. The Prophet said: "Let no one of you sell with the intention of disreputing what someone else is selling" (HR Muttafaq Alaih).

Fourth, earn a reasonable profit.

We often encounter merchants who sell goods at prices far exceeding their actual cost. They attempt to maximize profits without regard for the consumer's situation. Such unscrupulous practices were never adopted by the Messenger of Allah (SAW).

In contrast, the Prophet (SAW) always sought a fair and reasonable profit. When asked by a buyer about his cost price, he would disclose it with complete honesty. Ultimately, the Prophet’s objective in trading was not merely to pursue worldly gain, but rather to seek blessings from Allah (SWT). "Whoever desires the harvest of the Hereafter—We increase for him in his harvest. And whoever desires the harvest of this world—We give him thereof, but there is not for him in the Hereafter any share." (Ash-Shura: 20).

Fundamentally, a trade transaction arises from a state of mutual need between two parties; therefore, the transaction should yield mutual benefit. In accordance with the guidance of the Messenger of Allah, trade must be grounded in the principles of mutual need and mutual consent. To achieve this noble objective, one must honestly disclose the condition of the goods and reach a mutual agreement regarding the price, the nature of the goods, and the method of delivery to the buyer. The Messenger of Allah said: "Let no two parties involved in a sale part ways without mutual consent" (Narrated by Ahmad). "Indeed, trade is valid only when based on mutual consent" (Narrated by Ibn Majah).

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THE MUHAMMAD SAW TRADING ETHICS

“Engage in trade, for nine-tenths of one’s livelihood comes from trade” (Hadith).

The title above is drawn from the Prophet’s counsel; in essence—become an entrepreneur. Prophet Muhammad was an entrepreneur, as were his wife and his companions. Islam itself arrived in the region through Muslim entrepreneurs from the Middle East and China who stopped here during their travels. By becoming entrepreneurs, we gain greater economic independence and find it easier to help others, seek knowledge, and perform acts of worship. We can emulate the self-reliance and entrepreneurial spirit of Prophet Muhammad.

In his youth, the Messenger of Allah worked as a shepherd, tending to the flocks of others. At the age of twelve, he began to follow the path of his people; his uncle, Abu Talib, invited him to join a trading caravan bound for the Levant (Ash-Sham).

The Messenger sold goods belonging to Khadijah in the Levant and received a share of the profits. The Quraysh tribe was renowned for its trading prowess; they traveled to Yemen in the winter and to the Levant (Syria) in the summer. Abdullah, the Prophet’s father, was also a merchant; he fell ill and passed away while returning from a trading journey to the Levant.

When the Messenger Muhammad was twenty-five years old, Abu Talib secured a job for him with Khadijah, the wealthiest businesswoman in Mecca at the time. Khadijah offered a wage of four camels. For the first time, our Prophet led a trading caravan along the major trade route connecting Yemen and the Levant. The venture was a resounding success, yielding profits far greater than any previous trading mission had achieved. Thus, at his core, our Prophet was a resilient and capable worker.

The Prophet’s entrepreneurial aptitude was cultivated early on through his work as a shepherd. He tended the sheep of the Quraysh while still very young, helping to lighten the financial burden borne by his uncle. He wished to earn an income and achieve self-reliance, rather than remaining idle or merely playing. As a merchant, Muhammad embodied four keys to business success: siddiq (truthfulness), amanah (trustworthiness), fathonah (intelligence, shrewdness, and an understanding of business management and strategy), and tabligh (the ability to communicate effectively and persuade associates or buyers).

The book “Muhammad as a Trader” by the Pakistani author Afzalurrahman offers comprehensive guidance on how a Muslim should conduct themselves regarding the spending and management of wealth—going far beyond simple buying and selling. Prophet Muhammad established foundations of ethics, morality, and work ethic that were ahead of their time. Islamic business ethics—characterized by openness and a commitment to satisfying business partners—are grounded in the principle of mutual benefit. These concepts align with modern principles such as customer orientation, the pursuit of excellence, competence, efficiency, transparency, and fair competition.

The way the Messenger of Allah conducted trade serves as an exemplary guide for us. In his 1978 book The 100: A Ranking of the Most Influential Persons in History, Michael Hart ranked him number one on the list. Hart stated, "...Muhammad was ‘supremely successful’ in both the religious and secular realms." Indeed, Muhammad achieved success in both religious and worldly affairs.

The Prophet Muhammad's reputation in the business world was reported by, among others, Ibnu Hisyam and Muhaddits Abdul Razzaq. When he reached adulthood, the Prophet chose work as a trader/entrepreneur. When he didn't have capital, he became a trade manager for investors (shohibul mal) based on profit sharing with a large Makkah investor: Khadijah. The Apostle four times led trading expeditions for Khadijah to Syria, Jorash, and Bahrain in the east of the Arabian Peninsula. For more than 20 years, the Prophet Muhammad SAW was active in the field of entrepreneurship (commerce), so that he was known in Yemen, Syria, Basrah, Iraq, Jordan and trading cities on the Arabian Peninsula.

Since before becoming the mudarib of Khadijah's property, the Prophet often made business trips, such as to the city of Busrah in Syria and Yemen. In Sirah Halabiyah it is said that he made four trade visits for Khadijah, two to Habsyah and two more to Jorasy, as well as to Yemen with Maisarah. He also made several trips to Bahrain and Abyssinia. The trade trip to Syria was Khadijah's fifth journey, in addition to her own journey - the sixth - including a trip undertaken with her uncle when the Prophet was 12 years old.

In his mid-30s, he was heavily involved in trading like most other traders. Three of the Prophet's trade trips after marriage have been recorded in history: first, a trade trip to Yemen, second, to Najd, and third to Najran. It is also said that in addition to these journeys, the Prophet was involved in large trade affairs, during the Hajj seasons, at the Ukaz and Dzul Majaz trade festivals. Meanwhile, during other seasons, the Prophet was busy taking care of the wholesale trade in the markets of Mecca.

In conducting his business, Prophet Muhammad applied sound and reliable management principles, ensuring his ventures were consistently profitable. He integrated management values ​​into both his personal life and business practices, expertly managing processes, transactions, and relationships with all stakeholders involved.

Regarding how he managed his business, Prof. Afzalur Rahman writes in the book Muhammad: A Trader: “Muhammad did his dealing honestly and fairly and never gave his customers cause to complain. He always kept his promise and delivered on time the goods of quality mutually agreed upon between the parties. He always showed a great sense of responsibility and integrity in dealing with other people.” He further notes: “His reputation as an honest and truthful trader was well established while he was still in his early youth.”

Based on Afzalur Rahman’s account, it is evident that Prophet Muhammad was a merchant who was honest and fair in establishing business agreements. He never gave his customers cause for complaint, and his reputation as an honest and truthful trader was widely recognized from his youth. Yet, for many merchants, "honesty" is often a difficult standard to uphold.

As a debtor, Prophet Muhammad never defaulted on his obligations to creditors. He frequently repaid debts before the due date—as demonstrated in the case of a 40-dirham loan from Abdullah ibn Abi Rabi‘. Often, the repayment exceeded the original loan amount as a gesture of appreciation toward the creditor. On one occasion, he borrowed a young camel and subsequently instructed Abu Rafi‘ to return it in the form of a fine, seven-year-old camel. He said, “Give him that camel, for the best among people is the one who repays his debt in the best manner” (Narrated by Muslim).

The art of trading involves more than just proficiency in arithmetic—addition, subtraction, and multiplication—which rely on the left brain (rationality). To succeed as a merchant, Ipo Santosa (2008), in the book Muhammad as a Merchant, highlights the necessity of utilizing the right brain. The right brain is associated with emotions, friendliness, sincerity, gratitude, and finding meaning in life. The Prophet demonstrated the effectiveness of this approach.

Deception is forbidden. The Quran contains a passage stating, "Allah has permitted trade." This means that Allah sanctions entrepreneurship and marketing.

Consider also the words of Robert T. Kiyosaki: "The rich seek and build networks, while the poor look for jobs." Why? In accordance with Metcalfe's Law, the value grows exponentially. Islam never hinders entrepreneurs from earning material wealth; rather, such wealth is the ultimate outcome achieved after navigating a process that prioritizes blessings, trust, and the strengthening of social ties.

Engage in trade to help others—specifically, to assist those in need. People will not make a purchase unless they have a need for the product. "The best of people are those who bring the greatest benefit and are most useful to others."

 

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