Selling used gold to and buying new gold from the same trader
(Part No. 13; Page No. 467)
In this case the jeweler has to pay the value of the used gold first, then it is up to the seller to buy from the same jeweler or from another one. If the seller buys new jewels from the same jeweler, he has to pay him either from the money he took from him or from other money. This must be done otherwise the Muslim falls into Riba (usury)
based on exchange of an inferior quality commodity for a similar good quality one with difference in value. It is
(may Allah be merciful to them both):
That Allah's Messenger (peace be upon him) deputed a person to collect revenue from
Khaybar. He brought fine quality of dates, whereupon Allah's Messenger (peace be upon him) said: Are all the dates of
Khaybar like this? He said: No. We got one sa` (of fine dates) for two sa`s (of inferior dates), and (similarly) two sa`s for three sa`s. Thereupon, Allah's Messenger (peace be upon him) said: Do not do that rather sell the inferior quality of dates for dirhams (money), and then buy the superior quality with the dirhams.
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.