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Bartering is a Modern Trade

Cash-strapped people and businesses are using the Internet to link up

by Sarah Lindenfeld Hall

Cash-strapped companies and people are putting a new and sometimes electronic spin on an age-old form of commerce - bartering.

Staff photos by Takaaki Iwabu - Tammy Bunn of Willow Spring prepares clothes for the Barter4Kids event. Bartering, an ancient form of commerce, is making a comeback as the recession deepens. Companies that facilitate swaps say business is booming. (News and Observer) As the recession has deepened and unemployment has climbed, more people are trying to husband dwindling dollars and coins by exchanging their goods and services for somebody else's. Bartering has always been around, but it rises in popularity when times get hard, such as the Great Depression.

But this time around, it's not an exchange of eggs for fence mending between neighboring farmers. It's swapping Web design services for power washing the house. And it's taking place online.

Activity is up as much as 40 percent at companies across the nation that link businesses that barter, said Ron Whitney, executive director of the Virginia-based International Reciprocal Trade Association, which represents the formal side of bartering -- firms that help companies link up to trade goods and services.

In the Triangle, revenue was up 13 percent last year at the Cary-based Barter Business Exchange, where more than 700 North Carolina businesses barter with each other. The numbers this year are on track to top last year's total, president Maurya Lane said.

"We're slammed," Lane said. "Everybody is broke, and people are bartering like there is no tomorrow."

It's difficult to track informal, one-on-one exchanges, but local barter hunters say they are seeking trades through online sites and informally for things that they would normally pay for when banks are lending money and there's no fear of a layoff.

Craigslist, the online classified ads forum, reports that activity on its barter boards is up 100 percent in the past year. And, later this month, a Willow Spring mother of seven will launch Barter 4 Kids in Johnston County, where parents can exchange their children's used clothes and toys.

But bartering is also a tool for securing basic survival staples in tough times.

In Wake Forest, Gayle Ling is bartering just to put food on the table. Money started getting tight for Ling, the owner of Second Hand Rose, a thrift store on North Main Street, late last year. For the first time in 11 years of business, she was $500 in the hole in January. Her pantry was getting bare

"I'm not on food stamps," she said. "I could probably qualify for them."

In December, she started accepting canned and nonperishable foods for credit at her store. Two cans of vegetables translate into $1 worth of goods, for instance.

Ling said she's been able to fill her cupboards and help out her grown children, who have faced pay cuts at their own jobs. Bartering has also brought her enough food to donate to a Franklinton family whose home burned down.

Beyond cash

For Wes Ray, owner of the Durham limousine service, therightlimo.com, bartering used to be an occasional option to save money. Now, it's a way to keep his business alive and meet household expenses.

Prom season is usually Ray's busiest time of year when he typically charges a premium. This year, he's had to keep his rates low. And if he can't get cash for his services, he figures maybe he can exchange a ride for something he'd have to pay for otherwise.

He posted an offer on craigslist this month, looking to exchange a spin in one of his limos for an electrician and painter to work on his home.

"I do it now to bring in business," Ray said. "People are not spending money. If I'm not getting the money, maybe I can swap services."

Tammy Bunn, the mother of five of her own children and two stepchildren in Willow Spring, owned a barter business years ago that linked businesses that bartered.

Two months ago, she decided to get back into the game, but this time she's dealing in kids' clothes and gear. Shoppers will get credit for each onesie or toy truck they bring in, for instance, and use the credit for other items at the sale. Bunn hopes to hold these barter sessions at least three times a year.

Bunn said there's been a steep learning curve for prospective shoppers who are interested in being a part of the sale. With no money changing hands, some have trouble understanding exactly how it works.

"One hundred years ago, everybody was doing it. It needed to be done," said Bunn, whose motto is keep your cash for your bills.

Uptick in bartering

Bartering happens even in good times, said Whitney of the International Reciprocal Trade Association. And businesses, such as the Barter Business Exchange, which connect companies that barter, do well whether the economy is up or down.

In good times, a hotel might have an 8 percent vacancy rate and can fill those empty rooms by trading for cleaning services. In bad times, the hotel might have a higher vacancy rate, but still fill those rooms through trades with other businesses low on cash.

"It's all about taking advantage of the unused capacity a business has," Whitney said.

At the Barter Business Exchange in Cary, the network of business owners trade among themselves. The chiropractor, for instance, gets a mattress. The mattress company gets credit for the exchange and might trade it for service from another business in the network.

Lane, the president, has dropped the usual $249 fee to sign up - a "recession buster" sale. She makes her money by charging a 10 percent commission for the value of each trade.

Business owners use the service for business-related items, but Lane has also seen an uptick in bartering for health-related services, such as teeth cleaning, or personal expenses, including a visit to the hair salon.

She does caution people who swap on their own that barter income is taxable and must be reported to the Internal Revenue Service. But Whitney said it's likely most one-on-one trades never make it on the books.

Ray, who barters on craigslist, posted for an electrician and painter, but he's interested in any deal somebody might offer him. His fiancée might love a teeth whitening, he said. He encourages people who have something to trade to call for a service they need and see if the owner is willing to barter.

At this point, he just wants to get his vehicles on the road.

"I'm looking at bartering various types of services," Ray said. "This is the first time that in all the years I've been in business that I've ever bartered during a peak time of year."

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