ANALYSIS OF THE AUCTION MECHANISM FOR RAHN COLLATERAL IN ISLAMIC PAWNSHOPS

The auction mechanism for pawned goods (rahn) in Islamic pawnshops is a crucial meeting point between sharia compliance and the implementation of Islamic business ethics. This study aims to critically examine the auction procedures at the Blega Branch of the Islamic Pawnshop and assess their compliance with core ethical values in Islamic economics. Using qualitative descriptive methods, data were collected through direct observation, semi-structured interviews with employees and customers, and document analysis. The results show that the auction process is conducted transparently and professionally, involving key stages such revaluation of goods, official notification to customers, auction announcements, and an open and competitive bidding system. These procedures not only comply with Islamic jurisprudence on rahn but also reflect fundamental Islamic ethical values, including honesty (ṣidq), justice (adālah), and trustworthiness (amānah). This study concludes that the auction mechanism implemented at the Blega Branch of the Islamic Pawnshop not only complies with the formal legal framework but also represents a concrete manifestation of ethical business practices and aligns with sharia principles. This makes a significant contribution to strengthening ethical governance in Islamic financial institutions and underscores the importance of integrating moral values into operational mechanisms.