Even if you're short on cash, you still might woo attorney Trevor Eldredge into doing your legal work. But you need to offer him something irresistible. He said yes to a pair of diamond earrings. Firearms and electronics have decided allure. He's not drawn, however, to genealogy services or dance lessons, as recent would-be clients learned. And the current hot ticket into the esquire's heart is a really good washer and dryer. He just remodeled the laundry room at home.
Like thousands of Americans, Eldredge barters for part of his livelihood, albeit a small chunk.
Bartering's never been as hot in America as in some countries, but it has always had avid fans. Now the ancient art is seeing renewed interest, thanks in part to a recession that leaves cash-strapped Americans looking for other ways to sate their appetites for goods and services without money. "Let's trade" is becoming part of the recession's vernacular.
In its 2009 Consumer Trends Forecast, Colorado-based Fresh Ideas Group, a specialty communications agency, notes that buying is out, bartering very much in. Its No. 1 trend: "Bragging rights on trading possessions will trump shelling out for new purchases, with thrift shops and online exchange sites enjoying a huge boost." Bartering, it says, is sizzling.
Barter listings have doubled in the past year on Craigslist, a corporate spokesman says. New Web sites like TheSmarterBarter.com dedicated to matching would-be traders with what they'd like to acquire are springing up. And while barter clubs for corporations aren't necessarily attracting unusually high numbers of new members, they're seeing a definite increase in the number of trades being made between members. "We see members trading more and trading differently," says Krista Vardabash, director of marketing and public relations for International Monetary Systems, a barter club that serves businesses. "They're buying more of the necessities — not the vacations, but the dental cleanings."
The biggest increase is in "direct" trades — and that type of barter is challenging, requiring "an incidence of coincidence," she says. "You need to find someone who has what you want, but who also wants what you have. That's a coincidental thing. And they have to have a like value" since barter transactions are taxable. Without an equalizing unit, like the trade dollar that barter clubs use, it can get "complicated" accounting for value, she notes.
Frank Davis, who describes himself as a trading novice, struck a deal with a neighbor. He installed a sprinkler system. The neighbor fixed Davis' transmission.
Recent trades listed in newspaper and online classifieds on the Wasatch Front include swapping massages for a washer and dryer, an air conditioner for a camp trailer, custom painting "for anything of value." One woman offered a gently used inflatable swim pool for either an iPod or a milk goat, while another promised antiques and jewelry in exchange for home repairs. You see some of the same listings repeatedly. There's a frustrated landlord trying to clean up a mess at one of his properties. You can piece the story together by his increasingly frantic pleas for someone willing to trade sweat labor for time in a resort-town condo. He needs cleaners and painters and plumbers.
For people who have been laid off or seen work hours reduced, bartering may be a way to help hold it together. For others, like veteran independent trader Mark Knudson, it's a way of life. Driven by the joy of seeing what kind of crazy deals he can put together and buoyed by unusual success, he's traded for everything from cars and furnishings to production of a movie he wrote. He in part paid the actors and crew and suppliers with meals and hotel rooms in Mexico.
Still others use barter as a way to avoid the tasks they hate and to spend more time at the things they love.
It was the realization that she'd rather give a piano lesson than scrub the floor that led Tami Baird to offer lessons in exchange for help around the house. She trades time straight across, so while she teaches your child to tickle the ivories, you might end up doing her dishes. "I'm bartering with two other ladies right now," Baird told the Deseret News. "With one, I swap for haircuts." She gives piano lessons to help pay for lunch out with a pal or swim lessons for the kids, five boys and a girl between 10 months and 14 years old. It helps, too, when there's not enough cash to cover everything. When the family budget no longer stretched to include ballet lessons for their daughter, Baird was able to negotiate a trade. "I grew up in a big family, and we didn't get to do a lot of things we wanted to because we didn't have the money for it," she says. She barters to open those doors.
With so many people trading goods and services — and advertising it publicly — you'd think it would be easy to get people to talk about bartering. Not so, in many cases, the Deseret News found. Several people were willing to talk as long as their names weren't used. One attorney, who recently traded legal services for construction of a backyard deck, says he worries that everyone will want to trade, and his cash flow, already shrunken by the recession, will dry up. Trade doesn't pay for utilities. A woman who's swapping sewing services for language lessons says she doesn't want family and friends to know she can't afford extras right now.
A couple admit they're a little nervous discussing bartering, which is taxable. They hope they're doing their bookkeeping right.
The IRS treats barter as if it were cash for income tax purposes. In an IRS example, for instance, an artist trades a painting to a landlord for a month's rent. The artist must count the value of the rent as income and the landlord must declare the painting's value as rental income. (One expert trader notes humorously that a landlord is actually more apt to want you to paint his walls than to give him a painting.) Those who barter through barter exchanges or clubs (which make their money by charging a flat cash fee on transactions) have an easier time figuring out the taxes since the club or exchange keeps track, and the IRS views trade dollars the same as cash. Clubs like ITEX and IMS sign up member companies that offer services and place a certain monetary value on them. Member A fixes a boat and gets paid by Member B in trade dollars that are transferred to Member A's balance as surely as a bank deposit. He can then use those trade dollars as money to "buy" any service or goods offered by other barter club members. Vardabash tells of a landscaper who did a huge job in Illinois, then took the trade dollars he earned to Wichita, where he "bought" a pickup with it. A high-end restaurant in San Jose trades meal credits for the fresh flowers that adorn the tables. At the end of the year, IMS will give all of them a 1099 form showing what they got so they can pay taxes on it.
In direct trades, both parties agree on the fair market value of an exchange for tax purposes. They set the price, but that doesn't mean the transaction can't be audited by the IRS. "The key is fair market value," says Clay Sanford, a spokesman for the IRS.
Does he think that requiring people to declare all their trades on their taxes — You watch my kids Tuesday mornings and I'll watch yours Thursday afternoons — is unrealistic? "I don't think it encourages people to cheat. We expect all taxpayers, when they sign that line, 'I declare under penalty of perjury that this is correct,' to do the right thing."
Taxes don't make longtime barterers like Knudson the least bit uncomfortable. And he has been audited — twice. He does marketing for hotels and restaurants in Mexico, and they pay him with rooms and meals, which is the backbone of his years of trading. He swaps the hotel rooms and meal credits with barter clubs and individuals "for pretty much anything you find in the yellow pages" — and some things you don't, like that movie he made mostly with trade. The trailer, by the way, is online at Summeroftheeagle.com. He's bartered for furniture, for legal and medical services, for the marble and chandelier inside his house. When a pawnshop he'd done business with offered him four Econoline vans, he called a couple of barter clubs that each took one in exchange for trade credit he can use whenever. He got enough for one lift-equipped van to cover his cost for all of them. He kept another as a run-to-the-dump van.
He finds barter opportunities wherever he happens to be. He was standing in line to get some printing done when he started chatting with a woman who ended up offering California-style king-size beds for a Mexican vacation. He listed the beds online and with barter clubs and also traded with friends. And it all came together in a neatly tied package when he traded the fellow who was remodeling his home's living room the price of the labor for the fourth van and two of the beds.
"In today's economy, I think there's probably a lot more one-on-one trading going on. We don't see a big spike with clubs and people running to join them. But if you look at barter listings in places like Craigslist, there's a long list of things available that day," he says.
That, despite the fact that Americans have a "kind of sales mentality," rather than bartering, which is widely embraced in so many countries, he says. A decade or so ago, Boeing traded 10 747 jets to Saudi Arabia for oil. Lingerie factories in Russia may pay workers in pantyhose or other products they help make, which they can take into the marketplace and exchange for things they need. If you've ever wondered how someone in a developing country can live on dollars a week, barter is likely the answer. They trade for what they don't have money to buy.
Knudson lives that way, too. "In my world, I'm pretty confident in my ability to trade for almost anything — and save money on almost anything." It helps flexibility, he adds, that he doesn't have to need what you have to trade. He just has to feel certain that someone will, and then he can engineer a trade.
Knudson splits his time between homes in Seattle and Provo. He had owned a house in Provo that his kids lived in when they went to college, then he rented it out. "You get the call every week, termites, leaky faucet." Often, he'd trade for the repairs. But when he and his wife decided to move back to Provo for part of each year, they didn't want to live in that house. They wanted to start fresh, with something new. Knudson, through the ITEX barter club, found a guy who was building a new house and would take trade club currency and travel vouchers for the down payment. The house was half built already, and Knudson asked him to slow down. "I want to trade for flooring, countertops, rock, etc." Which he did. "We ended up getting a great deal on the house and helped build it. We got to pick our colors."
Entrepreneurs are seeing the opportunity that bartering offers in the midst of recession. Keith Reisig hopes to become the eBay of the bartering world with his nearly 2-month-old TheSmarterBarter,com. Reisig, based in Fort Lauderdale, Fla., got the idea when he traded his computer skills to a lawyer to do some simple legal work. It was a case of two people finding each other. But he figured there'd be a lot more trades possible if only people had a central place to look.
You fill out a form online, with basic contact information and what you're offering and hoping to find in exchange. Twice a week, TSB sends out e-mails to subscribers, with two lists — the state list and the national list. Some trades require both parties to be local. For others, China and Iceland would work just fine. Right now, in its beta stage, it's a free service. Already, they have close to 6,000 subscribers. And Utahns are among those wanting to trade.
e-mail: lois@desnews.com