Ruling on prizes offered by some store owners
Question

                We have some kinds of transactions that have become common nowadays. The dealer will offer his products for sale and distribute coupons to the purchasers, according to the value of each person’s purchase. These coupons are entered in a draw for prizes, then he has a draw, and some people win prizes that are given to them by this dealer. What is the ruling on that?.
Praise be to Allah.
    With regard to this kind of transaction we need to address 
    both the seller and the buyer. We say to the seller: Are you raising the 
    price of the product because of this prize, or not? If you are raising the 
    price then that is not permissible, because if the price is raised and the 
    people buy from him, they will be either losers or winners, i.e., they will 
    either lose out or gain something. 

    If this product is worth ten in the marketplace, for example, 
    but you sell it for twelve because of the prize, this is not permissible, 
    because the one who buys it for twelve will either lose the extra amount 
    that he paid, or he will gain many times that amount in the prize, so this 
    comes under the heading of gambling, which is haraam. This is one point.  

    If the seller says, ‘I am selling it for the regular price, 
    no more and no less,’ then he may offer those prizes to encourage people to 
    buy from him. 

    Then we turn to the buyer and say to him: Did you buy this 
    product because you need it, and you would have bought it whether there was 
    a prize or not? Or did you buy it only because of the prize? If he says the 
    former, we say: there is nothing wrong with buying from this one or that 
    one, because so long as the price is like the regular price, and you are 
    buying this product because you need it, then you will either be a winner or 
    you will be safe from loss. In that case there is nothing wrong with buying 
    from the one who offers prizes.  

    But if he says: I am buying it although I do not want the 
    product, I am only buying it so that I can get the prize, we say: This is a 
    waste of money, because you do not know whether you will win the prize or 
    not. 

    I have heard that some people will buy a carton of milk when 
    they do not want it; they buy it and throw it away, because there is the 
    chance of winning a prize. This is a waste of money, and it was proven that 
    the Prophet  (peace and blessings of Allaah be upon him) forbade wasting 
    money. 

    There remains a third point: if someone were to say: This 
    transaction harms other sellers, because if this seller offers prizes and 
    his price is like everyone else’s, then all the people will go to him and 
    the products of other sellers will remain unsold, so it will be harming 
    others. We say that this must be referred to the state; the state should 
    intervene if it thinks that this will cause trouble in the market, and it 
    should put a stop to it if it thinks that doing so is in the public interest 
    or that there is some tinkering with the market – and tinkering with the 
    market is something which should be stopped by the authorities.   

    Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him). 

    Liqa’aat al-baab il-Maftooh 
    (3/27).