Store Prizes

Question :

Is it permissible for us to participate in competitions organized by stores or companies, competitions wherein prizes are distributed?

Answer:

All praise is for Allah Almighty; O Allah, send prayers and salutations on Muhammad, his family, and his Companions:

We notice that more and more companies and stores are advertising competitions: they offer prizes to people who buy their products. Often people will buy products, not because they need them, but because they want the prize. This scheme is a form of gambling and it leads to wrongly taking peoples' wealth. Moreover, companies gain customers by this insidious scheme, diverting people from companies who sell products that are similar in quality. This scheme is unlawful, and so is the prize - it is a prize that is won through a form of gambling. The companies who tempt people in this manner should desist and compete fairly with others in the market:
"O you who believe! Eat not up your property among yourselves unjustly except it be a trade amongst you, by mutual consent. And do not kill yourselves (nor kill one another). Surely, Allah is Most Merciful to you. And whoever commits that through aggression and injustice, We shall cast him into the Fire, and that is easy for Allah."

This is a form of gambling: so it is not a legitimate form of trade since it is a form of the gambling which Allah has made unlawful due to its traits of wrongfully consuming people's wealth, and breeding enmity and hatred among them. Allah Almighty said:
"O you who believe! Intoxicants (all kinds of alcoholic drinks), gambling, Al-Ansab (stone altars), and Al-Azlam (arrows for seeking luck or decision) are an abomination of Shaytan's handiwork. So avoid that in order that you may be successful. Shaytan wants only to excite enmity and hatred between you with intoxicants (alcoholic drinks) and gambling, and hinder you from the remembrance of Allah, and from As-Salah. So, will you not then abstain?

We ask Allah to grant us and all of the Muslims to do what is right, to earn His pleasure, and we ask Him to rectify the affairs of His worshippers and that He take all of us away from every deed that opposes His Shari 'ah indeed He is the Most Generous and Most Noble.

May Allah send peace and blessings upon Muhammad, his family, and his Companions.

Source:
Ibn Baz
Fatawa Islamiyah, Vol. 8 Pages 273-274