بسم الله الرحمن الرحيم
This type of transaction is prohibited due to that which is narrated upon the authority of Abu Huraira where Allah’s Messenger -sallahu alayhi wa salaam- said, “whoever does two business transactions in one for him is the lesser amount of the two or less it’s usury (ribaa).” Abu Dawud and Ibn Majah narrated this with a sound chain. The expression (of the narrative) found with Ahmad, Tirmidhi, and Nisa’ee is as follows, “The Prophet -sallahu alayhi wa salaam- prohibited two business transactions in one.”
Ibnul Qayyim clarifies the meaning of two business transactions in one (in the book sharh tahdheebis sunan) where he states, “it has been explained to mean, when one says take this merchandise for ten (dollars, pounds, riyaals, dinaars, etc) upfront or for twenty in a postponed payment (whether the payments are made in installments or paid at one time later on) and it is in reality (the prohibited transaction known as) eenah. This is the meaning to be applied to the narration and surely if the intent is the upfront payment along with the deferred then no one deserves anything except the base price which is the lower amount (taken during an immediate transaction) from the two amounts. So if the seller takes an amount it should be the lower amount and if he takes the higher amount then it’s usury (ribaa). Thus there is no avoiding the lower amount from the two or less it’s usury and the narration has no other probable meaning except this.”
Translated by Najeeb Al Anjelesi
Source: المنظار في بيان كثير من الأخطاء الشائعة