ITEX in the News >> Short on cash, businesses turn to barter: February 1, 2010

Palm Beach Post Staff Writer

Bill Mann is a barter convert.

When the new owner of Red's Backwoods BBQ on Northlake Boulevard needs to buy more alligator meat for his gator bites appetizer, he barters meals at the restaurant for it.

Same thing goes for the new menus, T-shirts and caps he's having printed.

And when he needs plumbing work or the kitchen's hood needs to be cleaned, he plans on using barter for that.

"To me, it's a win-win situation," said Mann, who inherited the practice from the former owner.

"It gets people in the door that may otherwise have never come to your restaurant and fills up empty tables. I plan on doing even more bartering than we're doing now because it's working out so well."

Mann joins a growing group of Palm Beach County business owners who are turning to barter.

While this age-old trade practice of exchanging goods and services without the use of money may seem outdated, it's seen a resurgence because of the economic slowdown and tightening credit market.

"A lack of income and lack of credit are going to drive an increase in barter," said Steve Tadelis, a professor at the University of California, Berkeley. "Both have happened in spades in the last couple years."

Tadelis explained that interest in bartering rises when people don't have as much access to cash.

"With a slowdown, people buy less bread from the baker, tell the painter that they're holding off painting their homes. So now the baker and the painter don't have enough cash to get the things they need," he said.

Sam Villano of Palm Beach Shores is in that kind of predicament. The economy slowed business for his concrete resurfacing company, Curb Appeal Concrete. And that means he can't afford to buy a new car for his wife and daughter.

So last week, he decided to put up a barter ad on Craigslist: "pooldeck remodeling 4 decent car."

He's gotten only one call so far, but he's hopeful.

Bartering inquiries have grown tremendously on Web sites such as Craigslist.

"Attorney needed for real estate matters; trade for dental treatment," reads one Jupiter ad.

"4x6 motorcycle trailer for ???? " reads another ad from someone in Lake Worth, who suggests trading the trailer for guns or fishing poles.

Of course, when it comes to bartering, it's no longer just about direct one-to-one trading with your neighbors. Bartering networks such as Itex are seeing an increase in trades and members.

Richard Moseley, who owns a painting business in Boca Raton, said he plans to use barter to get an accountant to do his taxes this year.

"I don't have a lot of cash money, but I do have a lot of trade money and the ability to generate more doing more work," Moseley said. "A lot of people want their house painted on barter right now because they just don't have the cash."

Moseley said he saves about $150,000 getting services bartering his painting skills through the Itex and Trade First exchanges.

In this economy, that's about 40 percent of his business.

"My wife and I will not spend any cash money if we can do it on barter," he said, adding that he uses barter to do his dog grooming and to pay for his attorney, among other things.

But while more businesses are joining barter groups, the University of California's Tadelis cautioned that people need to have faith that the system they joined is going to last, or else a company could end up holding barter coins and nothing to use them on.

"What barter really boils down to is, you need to find a coincidence of needs," Tadelis said. "You can't have barter if you don't have something people want."