There are a couple reasons why barter restaurants need special care. For one thing, absolutely everyone has to eat.  That means they can potentially trade with anyone which makes them very valuable in your barter network. Also because food cost percentages are are usually around 30 percent they have significant cash costs. The last little twist to make things complicated is that you are paying their staff directly in part through your tip.

So…with all that in mind, I have a couple suggestions to keep on your favorite restaurant’s good side and hopefully keep them bartering for a long time.

1) Be nice
If there is a mix-up about when they accept barter as payment, be nice. Gracefully pay in cash and talk to the owner later. When you talk to him/her, don’t complain. Express how much you like their restaurant and that you called because you want to help their business.

2) Leave enough cash
Most resaurants need the tax and tip to be paid in cash. When I dine on barter I make a special effort as an embassador for barter to be a good tipper. In most areas tax is somewhere around 10% and a good tip is 20% so you are doing good if you leave about 30% cash.

3) Post on yelp
It’s in your best interest for your favorite restaurants to stay profitable so do what you can to help them. Besides recommending the restaurant to your friends you can also recommend it to strangers. You can do this by finding the restaurant on yelp.com and posting a glowing review. For those of you with smart phones you can download a free Yelp app to make this faster.

Here’s a great video to show new potential trade partners that you are introducing to the idea of a barter network.

A few times along my journey I’ve run into potential trading partners that have gotten lost along the way and would choose to spend cash over barter for the things they need.  As much as I love barter, I’d always prefer to receive cash.  And in turn I’d always prefer to make purchases on barter and preserve my cash.  It’s not really complicated is it?

A couple times now I’ve spoken with folks who have felt that the deal really didn’t fit barter and that they would rather just pay me in cash.  And to those people I would suggest that you always say:  ”YESSSSS!!!  I would be more than happy to accept your cash as payment!”  It does beg the question though…what in the world was going on in these people’s heads when they decided that it was better to pay in cash?

I think these people break into two groups:

1. People who just don’t understand barter
   I ran into this a while back with a laundry service I was talking to.  Because what I wanted from him was on-going and what he wanted from me was more of a one time thing, he didn’t feel that barter was appropriate and preferred to pay cash.  Ultimately the deal never happened.  He wasn’t motivated enough to go through with the deal on a cash basis and I could not explain barter to him well enough.  There are simply some people who WILL NEVER understand barter.  Probably it’s best to identify them early and move on.  I should do an article about that some time.
2. People who think they will get into trouble with the IRS
   I had an interesting case recently when I offered to have my company build a $7k website for a potential client on 100% barter.  One of the client’s concerns was that they wanted to write off the expense of the website and were concerned that if they did that large of a trade that they would run into tax trouble.  I told them that I would be happy to accept partial or total payment in cash, however, I also report all my barter income to the IRS and that there is absolutely no problem with their claiming a large barter expense on their taxes.  Furthermore I told them that they should definitely send me a 1099 which would back them up on the legitimacy of the expense.