Question :
We own a learning club that offers educational courses on various subjects on semi-annual basis. The contract signed with the student includes the agreed price and payments over the period of the course. The club offers promotional discount to the student who makes payment on time. However, the amount of discount is added to the original price of the course when the student is behind in the payment, as stipulated in the contract. For example, if a course costs (400 JDs), a student is offered a (100 JDs) as a discount provided that he/she pays the whole sum, which is (300 JDs), on time at the end of the course. However, if he/she is behind in payment, then he/she is required by court to pay the (400 JDs). Of course, this is taken care of by the club`s agent or lawyer in charge of the following up and collection, be that via court or bargaining. The agent or lawyer deliver this task in return for taking the amount of the discount offered to the student. What is the ruling of Sharia on this?
The Answer :
All perfect praise be to Allah the Lord of the Worlds. May Allah`s peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
Claiming the promotional discount from the student who is behind in the payments isn`t permissible in Sharia. This is because the contract was concluded based on the agreed amount between the club and the student where the latter is liable to make payments and where the discount is offered as part of the bargaining process and to encourage students to join the club. In fact, demanding the amount of discount is a form of Riba (Usury/interest), which is the addition over the original amount of the debt offered against delaying the payments.
Promotional discounts offered by the learning club to students are permissible whereby both parties of the contract must adhere to the stipulations made therein: The club must offer the service and the student must pay the agreed price.
In conclusion, the club is entitled to the agreed price without any addition. Both parties can agree on the original amount without discount where the student who makes payments on time is relieved from a portion of the agreed price and this is considered a promise made by the club to the students who make payments on time. And Allah the Almighty knows best.
