Chickens for Check-ups? Not exactly!

Thanks to my nephew David who originally pointed this out to me. And thanks to him again as I once again see that no one in my family really pays attention to the unique and, quite honestly, economy boosting business my husband Barry and I have. We operate a barter exchange, And for the purposes of this commentary I will clarify barter vs. trade and you will see why my tag line is “If you think you know barter…Think again!”

Every business seems to trade (I differentiate barter and trade although it is the same…but stick with me on this) A CPA does a lawyer’s tax and in turn the lawyer writes contracts and collection letters for the CPA. A painter may in fact paint the doctor’s house in exchange for annual physicals for the painter’s family. That is trading, one-to-one, which is legal and yes it is taxable. It is recognized by the IRS as a transaction that has value or income and is taxable. The lawyer and CPA, if doing services for each other’s businesses could in fact cancel out. And let’s face it – no one who trades ever reports it on their taxes.

This is where Lowden, and yes Reid and so very many other people have no clue what is going on in the real world. First of all, no one is bringing chickens to the doctor. And BARTER is not the same as BARGAIN. Barter is the regular retail price of something – cash or barter it must be the same.

Back to barter – Formal bartering is recognized by the IRS. That’s right Lowden – if I bring a chicken to the doctor it is doubtful the doctor is going to declare its value on his income taxes. Not so with true bartering. As a member of a barter exchange, member A goes to Member B for service and pays in barter dollars, not cash. What’s a barter dollar worth? In the US it is worth one US dollar. In Europe it is worth a Euro..you get the idea. I call it an alternate currency. Going back to trading – what if the doctor is a vegetarian? What if I don’t carry chickens in my wallet? For a business, to fill up down time or to move products off their shelves has been difficult, although it is getting better. By offering up what a business has for barter dollars, a business can move product, fill in downtime, etc. And get something tangible in return – a barter dollar. Yes a chicken is tangible, but our doctor is a vegetarian, remember?

So now you can take the barter dollar and spend it with someone else who accepts those barter dollars. Barter is becoming a small community currency. And with the power of great software (yup, mine & Barry’s other company along with our “son” Luther – www.BCLSoft.com) small barter exchanges can barter with each other.

So how does this help the economy more than Lowden’s chickens for checkups? First, the barter dollar is a currency which means you can take it from one person and spend it with someone else. Second, in the US it is reportable income. That’s right, as an exchange we are charged with completing and sending 1099B forms to all members and reports to the IRS. It’s taxable income. The chicken? Not so much.

So there you have it – how barter IS saving our economy, how SMART businesses have been bartering for quite some time and how true barter (not chickens for check-ups) is generating more tax dollars simply due to the increased revenue the barter exchange members are experiencing.

Any questions?

As the owner of a barter exchange for 6 years now, I’ve seen a lot of customer service issues arise between my members or my members and members of other barter exchanges. What is the difference between issues in the barter world and issues in the cash world? Barter members call their brokers first. In the cash world, they would call the other party directly to resolve the problem. And nine times out of ten, it gets resolved and both parties are happy.

When I first started out in this business, I would mediate every single dispute that came to my attention. For the most part, I was able to resolve them. But it took a lot of time away from doing the other things I needed to do, like helping members spend their barter dollars when they had too much, and promoting members more when they didn’t have enough.

The disputes were usually due to miscommunication, not reading emails, or misunderstood emails. The members could have saved a lot of time and energy if they just picked up the phone and called the other party. Not email the other party. Call them. And now, 6 years later, that is what I ask my members to do first.

Too often the context of an email is lost in translation. Sometimes things need to be explained verbally to avoid confusion. Pick up the phone. Talk to each other. If, after trying to work things out amongst themselves they still cannot resolve the issue, then I will get involved.

Premier Barter is a member of a larger network of barter exchanges called Barter21. As such, our members are able to interact directly with the members of other independent barter exchanges. The same rules apply. The difference here is that if I have to mediate, I contact my counterpart in the other exchange, not the member directly. Each exchange has to be responsible for their own members.

There is constant interaction between Premier Barter members and myself, Catherine (wife, and the real boss), and Deanna (our awesome broker). We value each and every member. We know who butters our bread.

The same holds true for members of barter exchanges – whether you are part of Premier Barter or any other exchange. Communication is the key. Often, most things are resolved through a quick email. But when someone doesn’t email you right back or resolve the issue, doesn’t it make sense to pick up the phone and call? If you are reading this blog then you are internet savvy and know how to read your email on a regular basis. Here’s a shock – not everyone even knows how to log into their email.

In a business environment, think about how you handle customer services issues. Does your customer pick up the phone or email? How do you reply back? Now think about when you are playing the role of cash consumer. If you buy something and don’t get it or don’t get a quick response, do you email and hope or do you pick up the phone and call? Obviously if the email doesn’t work you pick up the phone and then if that doesn’t work you call your credit card company.

Shouldn’t it be the same with your barter dollars? After all, you worked just as hard to earn you barter as you did your cash. So treat your barter dollars with the same respect.

And if you are the seller…Remember how hard the buyer worked to earn those dollars. If you wouldn’t treat your cash customers that way (whatever “that way” is) don’t do it to your barter customers. Money is money!

Well, I knew I had to get to this eventually. So here it is – my first blog for Premier Barter. Let me first say that I will try to make this informative and fun. Every now and then I may go off on a rant, but it’s my blog. I can do whatever I want!

There may be another person posting here also. You’ll be able to tell us apart by our different writing styles – she can actually write well. And that’s a pretty good lead-in to tell you who we are and what we are about.

My name is Barry Cohen. I own and operate Premier Barter. My business partner, Catherine, is also the love of my life and my wife. If any of you should speak to her, let her think she owns the company. It will make her happy. Oh, and Catherine will be the other person writing blogs here.

If you are not familiar with barter exchanges, I will go into more detail about that in a future blog. But for now I suggest you explore the Premier Barter website for more information.  For those that are familiar with barter exchanges, you’re probably thinking that we are just another run-of-the-mill, fly-by-night organization. You couldn’t be more wrong.

Premier Barter has been around for six years. We started on September 15, 2003 with no members. Today we have in the neighborhood of 500 members.  We are a member of the Barter21 network of independent barter exchanges, which gives us access to thousands of other businesses nationwide.  We are also a member of the International Reciprocal Trade Association (IRTA). In order to maintain membership in IRTA, a barter exchange must hold itself to the highest ethical standards.

Unlike many other barter exchanges out there, we do not allow our members to price gouge. Whatever their regular cash price is, that is what their barter price should be. We have been known to ask members to leave who do not abide by that policy. We also will allow a member to go on hold if they feel they have too many barter dollars in their account. That gives them a chance to spend a little before taking on more barter customers.

I don’t want to put everything into my very first blog posting, so I’ll end it here. Thanks for reading, and if there are any topics relating to barter that you want me to write about, leave it in a comment here.