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The question

What is the ruling on working in an installment sales office that sells goods—such as appliances—at a higher deferred price, and then buys them—or arranges for someone to buy them—in cash at a lower price, knowing that the appliances do not leave the warehouse, and their ownership is transferred and their locations are changed between different accounts of the office founders?

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Source: FtawySummary from Ftawy's records · added here Sep 2, 20261 min readAlso available in العربية
The answer

Tawarruq is the purchase of a commodity on credit to obtain cash by selling it. Scholars have differed on its permissibility, but the well-known opinion is that it is permissible, as no text has been narrated prohibiting it, and it is not valid to equate it with 'inah.

For Tawarruq to be valid, the commodity must not be sold to any of the office's associates, even if each account is separate, because the accounts administration is unified, and because the commodity might return to the original seller.

Organized Tawarruq (authorizing the office for the entire transaction before the contract) is not permissible because it is a trick to circumvent usury.

The method of taking possession of the goods varies depending on the type of goods, according to custom and tradition. It is sufficient to distinguish and designate them without removing them from the seller's warehouses.

Summary from Ftawy's records · added here

Reviewed by El Fatwa's sharia committee.

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Where this answer came from
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Ftawy
Original fatwa ID
101707
Added here
. This is when the answer was added to El Fatwa, not the fatwa's date.
Text
Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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Read the full answer on Ftawy