Customers pay me 50% deposit for products which I sell to them on a laybye system.

Answer

Once you have taken the deposit, the sale is concluded and final according to the Shariah. Your ownership is then extinguished. You are entitled to keep in your possession the item until fully paid.

In terms of the Shariah, any cancellation agreed on will in effect be a new sale between the parties. As such, a reduced price may be offered to the customer. 10% 'cancellation fee' may not be stipulated. It will corrupt and invalidate the sale.

In your agreement explain that should the customer no longer want the item, then you will purchase it from him at a lesser price to be mutually decided on when such an event occurs.