In today’s era of increasingly digital payments, various banks, digital wallets (e-wallets), and shopping platforms offer price discounts, points, or cashback as a form of promotion to attract customers. These programs have grown more popular as they are considered able to save on spending while also providing additional benefits to users. Many people deliberately choose a particular payment method simply because it offers larger cashback or rewards.

Even so, many Muslims still question the ruling on this practice. Is cashback and rewards included in the practice of riba? This doubt arises because both provide additional benefit in the form of money or profit to the user. Yet Islam clearly forbids riba, as Allah subhanahu wata’ala states:

“…Whereas Allah has permitted trade and forbidden riba…” (QS. Al-Baqarah [2]: 275)

So, does every addition received in a transaction automatically count as riba? The answer is not that simple. In fiqh muamalah, it is important to distinguish between riba and hibah (a gift), because not every additional wealth a person receives can be categorized as riba. The ruling on cashback and rewards depends heavily on the akad (contract), the source of the benefit, and the mechanism of the transaction underlying it.

The Difference between Riba and Hibah

In general, riba is an addition stipulated in a debt transaction or in certain transactions forbidden by sharia. This prohibition aims to prevent one-sided profit without productive economic activity or fair risk sharing. In other words, a person gains profit solely because they provided a loan to another party.

Unlike riba, cashback and rewards are generally given as part of a marketing strategy or a form of appreciation to customers. In contemporary fiqh studies, the cashback mechanism is often analyzed as hibah bi syarth, that is, a gift given after the recipient fulfills a certain condition, such as making a purchase or using a particular service.

This concept, it turns out, is not agreed upon absolutely among scholars. The Shafi’i school tends, on a textual basis, to view a gift accompanied by a condition as a problematic contract, since it is considered to contradict the basic nature of hibah as a tabarru’ contract (a voluntary gift). In contrast, the Hanafi and Hanbali schools offer more flexibility through the concept of wa’d mulzim (a binding promise) and hibah bi syarth al-‘iwadh, that is, a hibah linked to a certain condition or compensation.

Based on this analysis, the practice of cashback in modern e-commerce transactions can be positioned as a permissible form of hibah as long as it fulfills sharia principles, such as clarity of contract, transparency, and freedom from elements of fraud (tadlis), uncertainty (gharar), and gambling (maysir). Therefore, cashback cannot be directly equated with riba simply because it provides additional benefit to the consumer.

Not All Cashback Carries the Same Ruling

Even so, it is important to understand that not all forms of cashback share the same mechanism. If the cashback originates from a price discount given by the seller or merchant as part of a sales promotion, scholars generally view this as unproblematic. In this condition, cashback is treated like a discount given to the buyer, so it has no connection to a debt contract or to riba.

The matter becomes different, however, when cashback is given as a reward because the user stores funds, tops up a balance by a certain amount, or gains profit solely because of a debt relationship with the service provider. For example, an application may offer that every user who deposits a certain amount of balance will receive additional cash without any real buying and selling activity taking place. In such a condition, some scholars view that this addition potentially falls under a benefit arising from a loan contract (qardh) and should therefore be avoided.

This principle aligns with the atsar narrated by Imam Al-Bukhari in his Shahih. Abdullah bin Salam radhiyallahu ‘anhu once advised Abu Burdah:

“If someone owes you a debt and then gives you a gift of a load of straw, wheat, or food, do not accept it, for it counts as riba.”

This report shows that any benefit arising as a consequence of a debt contract must be examined carefully, so that it does not turn into a disguised form of riba.

When Are Cashback and Rewards Permissible?

In general, cashback and rewards can be permissible if they meet the following conditions: 

• given as a gift or promotion, not as profit from a loan contract;
• the conditions and mechanism are clear and transparent; 
• they contain no elements of riba, gharar, maysir, or fraudulent practice; 
• they originate from a halal transaction of goods or services; 
• they are not used as a means of encouraging people to lend funds to a service provider in exchange for a certain benefit.

Under these conditions, cashback is viewed as a hibah from the service provider to the user, rather than as an addition arising from a debt contract. Research on cashback in e-commerce and digital wallets also shows that such mechanisms can align with sharia principles as long as they fulfill the elements of transparency, fairness, and consistency with the rules of fiqh muamalah.

When Do Cashback and Rewards Become Impermissible?

On the other hand, cashback and rewards can become impermissible if they: 

• originate from a transaction containing elements of riba; 
• are given as a benefit arising from a loan or a stored balance under a contract that in essence constitutes qardh; 
• are obtained through fraud, manipulation, or an illegal investment scheme; 
• originate from a transaction involving goods or services that are forbidden, such as alcoholic beverages, gambling, or other activities prohibited by sharia.

Thus, the focus of assessment is not the cashback itself, but rather the akad and mechanism underlying it. In fiqh muamalah, the principle applies that the ruling on a benefit follows the ruling of its originating transaction. Therefore, two cashback programs that appear similar do not necessarily carry the same ruling if the structure of their contracts differs.

Conclusion

Cashback and rewards do not carry a single ruling applicable to all situations. Their legal status depends on the akad used, the source of the benefit, the mechanism of delivery, and the type of underlying transaction.

If the cashback is a price discount or a transparent promotional hibah, unrelated to interest or a loan contract, and obtained through a halal transaction, then this mechanism is essentially permissible. Conversely, if the cashback is given as a benefit from a loan, a balance stored under a qardh contract, or originates from a forbidden transaction, then the ruling can shift to impermissible, following the nature of the underlying akad.

Therefore, as a Muslim, it is important not only to look at the size of the profit obtained, but also to understand how that profit is generated. By understanding the difference between riba and hibah, Muslims can make wise use of various modern financial innovations without neglecting sharia principles.

Written by: Naflah Azizah

References

Akmal, A. N., Nurtajuddin, A. N., Supandi, R. A., & Al Hakim, M. A. (2025). Fenomena cashback dalam e-commerce: Analisis akad hibah bi syarth dalam perspektif fuqaha. Jurnal Riset Ekonomi Syariah, 5(2), 141–152. https://doi.org/10.29313/jres.v5i2.8523

Islam Question & Answer. (n.d). Ruling on discounts and cashback offered by e-wallet apps. https://islamqa.info/en/answers/305491/ruling-on-discounts-and-cashback-offered-by-e-wallet-apps

Halal Wallet. (2026). Are cashback rewards credit cards halal? https://www.halalwallet.us/blog/are-cashback-rewards-credit-cards-halal-2026