Forbidden Transactions: Al-'Aynah and An-Najash
|AUTHOR:||Shaikh Saalih Al-Fawzaan|
|SOURCE:||His book "Al-Buyoo' al-Munhee 'anhaa" (pg. 21-24)|
8. And from the forbidden types of business transactions is: The ‘Aynah Transaction. What is the ‘Aynah Transaction? It is when a product is sold to a person for a deferred price (i.e. a raised price to be paid later), then that same product is bought back from him at current value less than the deferred price for which it was given to him. So when the time comes in which the deferred payment is due, he pays his creditor in full. This is what is known as an Al-‘Aynah Transaction. It is called‘aynah (i.e. derivate of ‘ayn = same) because the same product that was sold is returned back to its owner. This is Haraam because it is deceiving someone into interest (Ribaa).
In reality, it is as if you are selling dollars at the current price for deferred dollars (i.e. to be given later), which are more than the original amount. And you have are just using the product as a device or means to gaining this interest. 
It is an obligation on you if you are owed money by someone, because you sold him some product for a deferred price that you let him sell it to someone else, or that you let him act freely in the matter – if he wishes he can keep it or if he wishes he can sell it to someone else, if he is need of the money. The Prophet (sallAllaahu ‘alayhi wa sallam) said: “When you deal with al-‘aynah transactions and you hold onto the tails of cows and you are pleased with the agriculture, Allaah will send humiliation down upon you. He will not remove it from you until you return back to your Religion.” Reported by Abu Dawood and it has supporting evidences.
9. And from the forbidden types of business transactions is: An-Najash. What is meant by an-Najash is when you display a product for sale in a public auction. Then a person comes and bids up the price of the item, but he doesn’t intend to purchase the item, rather he only wants to raise the price for the customers intending to deceive the buyers. This is the same whether he agreed with the seller to do this or he did it on his own. So whoever bids for a product and he doesn’t want to buy it, rather he only wants to raise its price for the customers, then this person is a Naajish, who has opposed the prohibition of Allaah’s Messenger (sallAllaahu ‘alayhi wa sallam). Doing this is Haraam, as the Prophet (sallAllaahu ‘alayhi wa sallam) said: “And do not perform Najash on each other.”
So a person who has no desire or need for the item, he should not participate in the auction and not bid for it. Instead, he should leave the customers, who really desire the item, to outbid each other.
Perhaps a person may want to help the seller, and sympathy for the seller overcomes him. So he bids up the price of the item for the purpose of helping the seller – according to his perception. Or perhaps, the seller may agree with a group of his associates to create a crowd around the item for sale in order to draw the people’s attention. This is considered Najash and it is Haraam because it is a means of deceiving the Muslims and a way of taking their money unjustly.
Also, the scholars of Fiqh have stated that what falls under Najash is when a seller tells his customer: “I bought this item for such and such price”, lying about the price, so that the buyer may be fooled and buy the item at an increased value.
Or it is when the seller says: “I was given this product at this price” or he says: “I received it for this much”, lying about the price. He only wants to fool the customers into bidding the price up to reach this alleged and false price, which he claims he spent for the item. This is from the Najash, which Allaah’s Messenger (sallAllaahu ‘alayhi wa sallam) forbade. It is a treachery and deception of the Muslims, and it is liying and disloyalty, for which he will be accountable for before Allaah.
So what is obligatory on the seller is that he reveals the truth if the buyer asks him how much he got it for. He must tell him the truth and not say that he attained it for this much money, lying about the price. What also falls into the definition of An-Najash is if the people of the marketplace or the storeowners agree to not outbid one another when an item is presented for sale, for the purpose of forcing the owner to sell it for a (discounted) cheaper price. Sp therefore, they are all participating in this act, which is Haraam. And this is from An-Najash. It is also a form of taking the people’s money unjustly.
 Translator’s Note: Another example is if you sell an item that is worth $25 to someone for $50 because he will pay you next month and not now. But for some reason, the buyer is short of money and wants to sell the book back to you, so he comes to you the next day and you make him sell it to you for the current market price, which is still $25. So when the date, next month, on which you agreed he would pay you the $50 comes, he pays you the money. So altogether you make $25 apart from the book, which is considered interest, and Allaah knows best.