Fatwa ID: 09069
Answered by Mufti Sakib Shadman
Question:
Assalam o alaikum
We have check cashing business in Dallas. We have a customer he cashes the checks for around 150 k every week. The procedure is that he send us the list of checks through phone and we make envelopes ready when his employees comes. Then at the end of the day he bring us the real checks for deposit, we charge him one percent if we deposit within the next whole week. But sometimes he has some issue with his bank or from his payer so he tell us not to deposit those checks until I tell you to deposit. In this scenario we charge him extra one percent on his checks, cause it goes over a week and enters in new week. You good self is requested to please enlighten me that this practice is legal according to the sharia or it comes under the circumstances of interest, I will be really appreciated if I get any response
JazakAllah
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
You mentioned that your client presents you with 150k worth of checks every week. You pay his employees in cash on the same day that you receive the checks. Later, you deposit his checks to receive the money back into your account. You charge him a 1% fee for this service and an additional 1% if the customer asks you to deposit his check into your account the following week.
These fees are tantamount to ar-Riba an-Nasee’ah (usury arising from deferred repayment), i.e., providing a loan for a period of time in exchange for additional interest. [3] In other words, the business lends the cheque amount to the customer in cash but deducts 1-2% for the delay in receiving the full amount. Thus, the 1-2% fee is in lieu of a time delay (even if the delay is a few hours) and is Haram for you to charge. [1] You may only cash the customer’s check for its full value.
However, if the 1-2% is restructured as a predetermined flat-rate fee charged solely for administrative expenses, and it is not for cashing the cheque in advance of its due date, then there is no prohibition. This is considered a permissible charge if the administration fee reflects the true costs of providing your service. You may even charge a higher predetermined fee to customers who regularly ask you to delay depositing their checks if the delay adds to your administrative costs.
Hence, your fee should be structured as a flat, fixed fee to cover administration and service costs only, not because of the delayed deposit of the check after paying the client’s employees upfront. Otherwise, the 1-2% fee is Haram to charge because you are essentially charging your client an additional interest fee for repaying a loan late. [2]
Only Allah ﷻ knows best.
Written by Mufti Sakib Shadman
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
References:
[1]
قَالَ (الرِّبَا مُحَرَّمٌ فِي كُلِّ مَكِيلٍ أَوْ مَوْزُونٍ) أَيْ حُكْمُ الرِّبَا وَهُوَ حُرْمَةُ الْفَضْلِ وَالنَّسِيئَةِ
Al-ʿInāyah Sharḥ al-Hidāyah, with Fatḥ al-Qadīr in the margin, Dar al-Fikr / Dār al-Ḥalabī, n.d. (Vol. 3), p. 3.
Accessed via al-Maktabah al-Shāmilah – 03-05-26.
[2]
قال: وإذا عدم الوصفان الجنس والمعنى المضموم إليه حل التفاضل والنساء… فحرمة ربا الفضل بالوصفين، وحرمة النساء بأحدهما
Al-Bināyah Sharḥ al-Hidāyah, Dār al-Kutub al-ʿIlmiyyah, n.d. (Vol. 5), p. 270.
Accessed via al-Maktabah al-Shāmilah – 03-05-26.
[3]
وروي «إنما الربا في النسيئة» حقق ﵊ الربا في النسيئة من غير فصل بين المطعوم، والأثمان، وغيرها فيجب القول بتحقيق الربا فيها على الإطلاق، والعموم إلا ما خص، أو قيد بدليل، والربا حرام بنص الكتاب
Badā’iʿ al-Ṣanā’iʿ fī Tartīb al-Sharā’iʿ, Dār al-Kutub al-ʿIlmiyyah, n.d. (Vol. 5), p. 187.
Accessed via al-Maktabah al-Shāmilah – 03-05-26.