Bartering 101

With the economy in a rut many are turning to barter
By Larry Burge
The oldest known method used to make deals is coming back strong. Swapping one item for another, better know as bartering, has become more common as money has tightened during the nation’s economic downturn.
“Kids barter all the time,” said John C. Moore, cofounder of the bartering Web site U-exchange. “In school, kids always trade sandwiches, trading lunches or baseball cards. When times get tough, people get a little more creative. That’s for sure.”

The sluggish economy has created more interest in bartering. For the past year, consumers have been taking hits on several fronts including high gasoline prices, job layoffs, tight credit and an eroding housing market.
This prompted Moore and his partner Barb Di Renzo to cofound U-exchange, u-exchange.com. Another popular Web site Craig’s List, craigslist.org, also has a bartering section. Locally, individuals as well as pawnshops barter.
“We were looking on the Internet for a place to barter,” Moore said. “There really wasn’t any that catered to bartering only. What you would find were business sites or sites where most people were buying and selling. And if they were trading, it wasn’t always a legit trade. What they were doing is saying, ‘I have this item, and I’ll take $100 cash.’ That’s not a trade. They’re selling.”
Moore said his intention was to bring traders together — consumers and businesses — at one Web site serving all barters.
“We’re having a huge increase right now,” Moore said. “We have to move our site to a new server, because there are so many people needing our service right now.”
Compared to 2008, Moore said, he has seen hits on his Web site more than double. Compared to the same period in 2008, from Feb. 10 through March 11, he saw an 147 percent increase in the number of hits. Signups on his site also increased from about 1,900 in 2008 to more than 4,000 in 2009, a 117 percent increase.
Everyone has something to offer as barter, Moore said. It could be anything from a yard sale item to a diamond ring, to a service such as mowing grass for rent, cleaning a house for food or running errands for a bicycle to get there.
Deborah Coody, the wife of former Fayetteville Mayor Dan Coody, said she bartered with a renter once for doing some yard work in exchange for part of his monthly rent. Another local trader is David Kelley.
“I’ve been buying, selling and trading for about 10 years,” Kelley said. “I mostly bought and sold instead of bartering, but there’s a difference. I’m now mostly retired. I know some people who don’t make much money, and they’re constantly trading. They at times make some good deals. Sometimes they lose and sometimes they win. That’s the way it is when you’re trading. When you trade, there’s actually not much legality to it. You just swap stuff.
“I saw a story here a while back on television. A guy started out with a paperclip and ended up with a house.”
An Internet Google search located the story of Kyle MacDonald. He started with a red paperclip on July 12, 2005, and 14 trades and almost one year later, had traded up to a fully furnished two story, three bedroom, two bath home in Kipling, Saskatchewan, Canada.
“Trading is somewhat like playing poker,” Kelley said. “Good traders know when people lie to them. But some people you can’t trust. I once traded for a washing machine and dryer. The people who had them said the pair worked perfectly. But their sworn words couldn’t have been any sweeter if they had had a piece of candy in their mouths. They flat out lied to me.”
Honest traders, however, have reputations to maintain, Kelley said.
Employees at three Fayetteville pawnshops said their businesses barter. Taking things in on trade for items pawned at Castle Rental and Pawn on Sixth Street, employee Shawn Unger said, is done most in the company’s Springdale location. Unger said customers could bring in items for trade and apply that item’s pawn price toward a down payment on layaway of other items.
Mike Boley, an employee at Big Al’s Pawn Shop on School Avenue, said he has had customers come in and trade tools for a guitar. In addition, at the School Avenue location of Mountain Man Supplies and Pawn, employee Tim Roberts said he has made trades before. He said a guy with a Remington shotgun might want to trade it for a Benelli (shotgun). However, all three pawnshop employees said their shops always require something “to boot” with any trade.
Phrases like “to boot” and “horse traders” might be “foreign terms” to beginning barters. But with the Internet trader and current worldwide bartering community, those and other terms common to bartering might determine the difference between making a good trade or not. Those familiar with such bartering language can be a step ahead of those who are not.
The idiom “to boot” helps barters make a fair trade. The phrase means one trader offering something in addition to the agreed upon barter to make what both dealers are trading about equal in value.
For example, say one trader has a high-definition television with an estimated worth of $1,000 and wants to exchange it for someone’s $800 computer system. The second person might make up the difference between the two by a cash offer, provide an additional service or by throwing in another item worth $200 “to boot.”
Someone with a gift for setting up deals is termed a genuine “horse trader.” The first skill in a horse trader’s bag of tricks is to recognize when what one person is offering for trade is another person’s need. The second is convincing those willing to trade to make a deal while looking for a way to close the transaction between him and the other traders.
A good “horse trader” would recognize an opportunity when he has for sell or trade a set of Spanish textbooks that he used for last semester’s class. He has a friend with a kitchen table with four chairs, which he wants for his apartment. He finds another student with a computer for sale or trade, because he received a new laptop as his graduation gift. The “horse trader” puts together a deal between the three of them. He first trades his Spanish textbooks for the computer, and then trades the computer for the table and chairs.
Bartering can be fun as well as beneficial, Moore said. Items no longer used or needed, a house cleaning service or almost any skill can be bartered. Items not needed can remove clutter from a house or garage or empty a storage shed by bartering.
The popular Craig’s List Web site barter section lists items under transportation from motorcycles to motor homes, sports equipment, televisions and appliances, lawn equipment, pets and farm animals such as prize winning chickens, computers and firearms.
Some of the most humorous items for trade on the U-exchange Internet site include firewood to trade for farm animals, a Dell Inspiron 6000 laptop for firearms, a computer for a lawn mower, massage therapy for landscaping, hair care for housekeeping and a “cockatiel worth $600” for a laptop computer.
For business bartering, The American Exchange Network through the Southern Barter Exchange in Little Rock gives advice for business barterers wishing to exchange services from a to z, from advertising to wedding planning.
The National Association of Trade Exchanges reported on its Web site that more than 350,000 business members in the U.S. and Canada participate in its organization’s bartering. It claims to have 400 barter offices across the U.S. and Canada. It also reported on its Web site these businesses traded between $3.8 billion and $4.3 billion last year.
On its Web page heading “Bartering: Making a Comeback,” Innovate Arkansas reported, “Businesses are increasingly using barter and trade practices to save a buck in their tight budgets.” It reported during the last two years bartering memberships have increased about 12 percent.
Deterrents to bartering include the added time it takes to make a deal and whether somebody enjoys “horse trading”. However, with the economy reported at its lowest point in 25 years, exploring new ways to get rid of items not needed by trading for something needed, whether a fair trade or not, can help stretch almost any household budget. Happy bartering.