Can a retailer retain the deposit if the transaction is cancelled upon the request of the purchaser?
The question, as received
Can a retailer forfeit a deposit if the transaction is cancelled upon the request of the purchaser?
The answer
In principle, a transaction cannot be unilaterally cancelled. To rescind a purchase, both parties have to mutually agree to terminate the transaction.
Explanation
Deposit is commonly referred to the amount forwarded in the beginning of a transaction to show one’s commitment to the transaction.
In terms of Sharī`ah, the above deposit is regarded as earnest money or a down payment and is a percentage of the total price.
In the event of a mutual rescindment of a transaction, the seller is obliged to return the deposit and cannot forfeit the right of the buyer. The deposit funds will remain a trust in the possession of the seller and must be given to buyer.
And Allah knows best.
Mufti Faraz Adam
Based on the Hanafi school and on the question as it was asked. Another mufti may reach a different conclusion. Read the disclaimer.