Ruling on the seller saying “I was offered such and such for the item” when he is lying

The seller must be honest and truthful in his selling, and not tell lies, so that Allah will bless his business. If he tells lies, Allah will take away the blessing (barakah) from his business.

The Prophet (blessings and peace of Allah be upon him) said: “The two parties to a transaction [that is, the seller and the buyer] have the option [of cancelling it] so long as they have not parted. If they are honest and disclose any defects, their transaction will be blessed for them, but if they conceal defects and lie, the blessing will be erased.” Narrated by al-Bukhari (2079) and Muslim (1532).

If the seller says that he was offered such and such for an item, when he was not offered that amount, then he is undoubtedly lying and is consuming the purchaser’s money unlawfully, because if the purchaser believes that the seller was offered 105 for the item, he will undoubtedly offer him more, so the seller will have deceived him and lied to him in order to increase the price, thus he will be consuming his wealth unlawfully.

The Prophet (blessings and peace of Allah be upon him) forbade artificially inflating prices, as he said: “Do not artificially inflate prices.” Narrated by al-Bukhari (2160) and Muslim (1515).

Artificially inflating prices refers to when someone comes along who does not want to buy an item, but he offers more for it so as to deceive the purchaser and make him pay more for it.

Ibn Qudamah said in al-Mughni (6/305):

If the seller says: I was offered such and such for this item, and the purchaser believes him and buys it for that amount, then finds out that he was lying, this comes under the heading of artificially inflating prices. End quote.

So it is haram, because it is lying and deceiving. This seller must inform the purchaser of the truth, and in that case the purchaser has the right to cancel the deal, or they may agree that part of the price that the purchaser paid should be returned.

Shaykh Muhammad ibn ‘Uthaymin (may Allah have mercy on him) said in ash-Sharh al-Mumti‘ (8/302):

Another example of artificially inflating prices is when the seller says to the buyer, “I was offered such and such for this item,” but he is lying and the purchaser will say: “If you were offered two hundred, I will buy it for two hundred and ten,” then he buys it for two hundred and ten. If he then finds out that it is only worth one hundred and fifty, then he has the option of cancelling the deal, because he was cheated (deceived) in a way that resembles artificial inflation of prices. End quote.

And Allah knows best.