And also from the business transactions that are forbidden is:
The Deceptive Sale, which is when you deceive your Muslim brother by selling him a product that has defects and you know about these defects yet you do not inform him about them.
So this kind of sale is not permissible and it is from deception, swindling and fraud. It is obligatory on the seller to make these defects clear to the seller and to let him know about them. But if he fails to inform him about them, then this is from deception and swindling, which Allaah’s Messenger (sallAllaahu ‘alayhi wa sallam) forbade in his saying:
“The two persons conducting a business transaction are in a state of goodness for as long as they do not separate from one another. So if they are both honest and open with one another, they are blessed in their transaction. But if they lie and conceal (the truth) from one another, the blessing of their transaction is wiped out.”
So it is obligatory upon us, O servants of Allaah, to be sincere.
Allaah’s Messenger (sallAllaahu ‘alayhi wa sallam) said: “The Religion is sincerity, the religion is sincerity, the religion is sincerity.” They (the Companions) said: “To who O Messenger of Allaah?” He said: “To Allaah, to His Book, to His Messenger, to the Muslim leaders and the Muslim general masses.”
So the Muslim must be sincere. What is meant when one is sincere towards something is that he is free or absolved from certain things. So being sincere means being free from cheating (for example).
One time the Messenger of Allaah (sallAllaahu ‘alayhi wa sallam) passed by a person selling some food in the marketplace who had his food in a pile. So the Prophet (sallAllaahu ‘alayhi wa sallam) put his noble hand inside the pile of food and found some wet portions in the bottom of the pile. So he said: “What is this O owner of the food?” He said: “The sky has affected it” – meaning the rain has damaged some of it. So Allaah’s Messenger (sallAllaahu ‘alayhi wa sallam) said: “Then won’t you make it visible so that the people can see it? Whoever cheats us (i.e. swindles Muslims) is not from us.”
This hadeeth is considered one of the fundamental principles in conducting business transactions between the Muslims. So it is not permissible for a Muslim to conceal the defects. If his merchandise has a defect then he must make it visible so that the buyer sees it and is aware of it, and so that he could acquire the item for a price that is appropriate for this defect. He must not acquire the item for the price it would be if it were flawless, for then the seller would be deceiving, cheating, fooling and swindling, based on the saying of Allaah’s Messenger: “Then won’t you make it visible so that the people can see it? Whoever cheats us is not from us.”
So O servants of Allaah! How much of swindling do you see in these days? How many times do you see people placing the defective items in the bottom of the containers and cases while placing the good items on the top – whether vegetables or food items? They purposely put the defective item in the bottom while putting the flawless item on the top. This is trickery, which is done intentionally. We ask Allaah to pardon and forgive us and you, and that He make our rizq (sustenance) Halaal and that He make our earnings Halaal. And we ask Him to provide us from His vast Bounty.
O Allaah suffice us with what You have made Halaal over that which You made Haraam, and (suffice us) with Your Bounty over that of others besides You. And forgive us, have mercy on us and accept our repentance. Verily, You are the One who accepts Repentance, the Bestower of Mercy. And may the peace and blessings of Allaah be on Allaah’s Messenger.