When the world was hit by a pandemic Covid-19 and the country went into lockdown, everyone was trapped inside the house. However, not everything is bad; this also has resulted in a positive impact and improvement in the online industry. There has been an increase in online activity such as through social media because the virtual world is the only link to interact with people and the outside world.
We frequently see people promoting where they go, what they eat, what they buy, and many more other things on social media. They claim that this activity will generate income for them. But how will this activity generate income? This is what is called affiliate marketing.
What is Affiliate Marketing?
As a result of the pandemic, many individuals lost their employment, resulting in the establishment of a range of new professions known as the 'Gig Economy'. Affiliate marketing is one of the available professions. There are numerous affiliate programmes available, including Amazon Associates, Shopee Affiliate Program, Airbnb Associate, and many others.
The basic concept of this programme is that you promote a product or service online on behalf of a third party in exchange for commissions that are paid out on successful sales at no extra cost to the buyer. Each time a customer purchases something, you get paid a commission which is commonly based on the concept of Pay Per Sale (PPS) or Pay Per Click (PPC). When a customer decides to buy, they will then deal directly with the third party to complete the transaction or the order, you just simply direct them in the right direction by providing a link.
Is Affiliate Marketing Halal?
In general, an income generate from affiliate marketing activities is permissible because it is based on the service provided. This implies that as an affiliate marketer, you are essentially an advertiser. Unless you are marketing haram products or services, such as alcohol, gambling, or forex. The income generated will be deemed as haram, as you are promoting non-halal products and services.
The dropship business law issued by the Mufti of Federal Territory, Malaysia can also be referred to as a guide for this issue since the dropship and affiliate marketing mechanisms in question use the same concept that is wakalah. According to the Mufti of Federal Territory Malaysia, dropshipping business is essential because dropshippers are considered as employees or agents for the products or services. It is more of a representative nature in the concept of wakalah. However, it is necessary to ensure that there is no element of gharar or deception.
Promoting Products that You Have Not Used
The issue arises when you, as an affiliate marketer, promote products or services that you have not used. If the items themselves are not haram and you are marketing them with the belief that the products or services would benefit the consumer, it is permitted to advertise them as an affiliate even if you have not tried them.
The only problem is when you are promoting products that you do not like nor endorse and do not believe in yourself! However, you are still trying to convince or persuade the community that it would benefit them just for you to make financial gains and compensation. Then, it is believed the income generated will be haram. Furthermore, from a moral and ethical standpoint, this is also deemed unethical in Islamic business ethics.
Purchaser Ends up Purchasing Haram Product
The question also arises when, an affiliate marketer promotes halal products, yet the user ends up purchasing non-halal products or services. Is the commission income received halal? In our opinion, the commission received from this activity can be categorized as syubhah (doubtful).
In such instances, the chance that the customer would purchase non-halal products or services is based on the known change in probability. For example, the affiliate marketer is promoting a halal product but from a website where most of its products are haram, so there is a high probability for the users to accidentally purchase non-halal products from the website.
However, it is different if you are promoting a halal product from a platform where most of the products are halal. Yet, users still end up buying non-halal products. In our opinion, the commission received is permissible as you cannot control the actions of the user. It was them who made the choice.
Conclusion
Affiliate marketing is permissible in Islam and the commission earned from the service provided is considered halal. However, it is advisable for affiliate marketer to only promote halal products that it believes to bring benefit to the user and from the shariah-compliant platforms to prevent such issues of the user ending up purchasing non-halal products is happening. Wallahua'lam.