What is the ruling regarding the transaction known as 'Al-'Inah'?
Chapter on Selling the Musarrah (Animal with milk retained in udder)
Al-Mughni
Book of Sales
Primary text
The transaction known as 'Al-'Inah' refers to the sale of an item on credit and then repurchasing it immediately for a lower cash price. The evidence against its permissibility is the severe warning narrated by Abu Dawud on the authority of Ibn Umar, where the Prophet, peace be upon him, stated that when people engage in 'Al-'Inah,' take the tails of cattle, become content with agriculture, and abandon Jihad, Allah imposes humiliation upon them that will not be lifted until they return to their religion. This threat indicates its prohibition.
Supporting text
Al-Ahmad narrated that 'Al-'Inah' specifically applies when a person only sells his commodity on a deferred basis. If he sells for both cash and credit, there is no issue. He disliked a man whose only trade was 'Al-'Inah' and who refused to sell for cash. Some scholars view the dislike of deferred sales as being due to their resemblance to Riba, as the seller often intends the additional price for the delay. However, the general deferred sale itself is not prohibited by consensus unless it is the seller's sole trade.