Selling old gold for new

I am an owner of a gold shop and have heard that it is not permissible to sell gold on a delayed payment basis. Thus, if I were to buy new gold at an old price with an immediate, mutual transaction and I paid the price, and we agreed that the remaining amount, that is, the difference between the old and new prices, will be after exchange, then would this exchange be lawful? Sometimes we give the distributor the equivalent of the weight of the gold, and we agree that the difference, which we call ‘workmanship cost,’ will be paid later.

It has been authentically narrated from the Prophet ﷺ reported by Bukhaary, Muslim and others that he said,

Gold for gold is a ribaa, usurious or interest-type transaction, except when the exchange is done at the same time.” (Bukhaary 2134 and Muslim 1586);

… equal in weight, like for like.” (Muslim, 1588; also see Bukhaary 2176)

Therefore, it is not permissible to sell extra with gold for gold, or silver for silver, or barley for barley, or dates for dates, or salt for salt, and all other products or items that are of this category. When items of the same type in this category are sold, there are two conditions which must be fulfilled, that they be equal in value, and that the exchange be immediate and mutual. There can be no extra in weight. Hence, the exchange must be instant, and it must be equal. Scholars affirm that any uncertainty in the weight being equal is the same as it amounting to extra. This is the great extent that scholars have gone to in order ensure that no extra is exchanged, and that the exchange is done immediately and mutually, using terms like ‘give and take immediately,’ ‘hand by hand on the spot’. The issue of ribaa is extremely serious and dangerous.

(ٱلَّذِينَ يَأۡكُلُونَ ٱلرِّبَوٰاْ لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ ٱلَّذِي يَتَخَبَّطُهُ ٱلشَّيۡطَٰنُ مِنَ ٱلۡمَسِّۚ)
Those who consume ribaa will not stand on the Day of Resurrection except as one stands who is being beaten by the devil into insanity.” (Al-Baqarah 275)

This fact is so to the extent that some exegetes of the Qur’aan have mentioned that those who consume ribaa will be resurrected on the Day of Judgement in a state of insanity. Therefore, it is essential in the aforementioned scenario that selling customers old and used gold for Dirhams and taking possession of its price be at the same time as buying the new gold, and that it is paid for instantly, hand by hand, as the Prophet ﷺ stipulated to a person who was selling dates still on its branch,

Sell the bunch of this type for Dirhams and then buy with the Dirhams another type of bunch.’ (Bukhaary 220)

Therefore, if the item is of the same type, there can be no extra, but if the types are different for example, selling gold for dates),

If the types are different, sell as you like as long as it is immediate, mutual exchange.” (Muslim 1587)

… sell as you like…

means, from these ribaa products with differing amounts, but exchange has to be on the spot. In the case of the questioner, it is not permissible for him to deal in this way and make the difference in price a recompense for the goldsmith’s labour. This is because, when a necklace was sold at the time of the Prophet ﷺ for 12 Deenaars, it had beads in it, but the Prophet ﷺ said,

Do not sell it until they are taken out!” (Muslim 159)

This allows for the amount of gold to be known exactly so that equivalence can be established. The Prophet  ﷺdid not take into consideration labour although it was clear that there were beads in the necklace. Therefore, there must be a separation between the gold and non-gold items. Gold must be sold in equivalence and on the spot or be sold for Dirhams and new gold jewellery be bought with the Dirhams. Anything related to gold, whether jewellery or minted coins, must be equal, and it must be an immediate, mutual exchange.