Does this open vault remind you of your barter exchange account?  Is it just me or does it seem totally insane the way barter exchanges handle (or should I say DON’T handle) security?  As of right now I belong to two exchanges.  Both have the same general idea about security.  Anyone with an account that has my ID number can charge my account without my permission through the exchange’s website.  OK.  That’s wierd enough, but the real punch line is that I need the other party’s permission (or my broker’s blessing) to remove a charge from my account.  I can’t do that through the exchange website on my own without approval.  That totally blows my mind.   This is like saying that anyone can write a check out of my bank account on their signature (not mine) and I have to beg “pretty please” if someone charges me incorrectly.

Shouldn’t it work exactly the opposite of that?  Shouldn’t someone have to request my permission to charge my account (including my broker) and shouldn’t I be able to remove an erronious charge without outside approval?  When I’ve asked my brokers about this I’ve gotten two responses:

1. This is a left over vestige from when all barter transactions were processed manually.  That may very well be true, but it in no way satisfies my desire for security.
2. This is the way we always do and it is extremely rare for there to be any problems because of it.  Well, I have to admit that I’ve never had a problem either so maybe I’m worried about nothing.  That being said the whole premise of vendor being able to charge my account without my specific permission doesn’t sit well with me.

I should probably point out that as strange as this system might sound to someone outside the “barter community” this is a TOTALLY NORMAL and accepted practice for barter exchanges.  It’s not just my two barter exchanges that do this.  As far as I can tell this lack of security is a common thread across the majority of barter exchanges.

Fairly early on in my “barter experience” I ran in to a couple different people who found me through a barter exchange, but wanted to arrange a deal outside of that exchange.  This comes down to a basic ethics issue.  Barter exchanges send business to me.  That’s really their primary job as far as I’m concerned.  They are my “outside sales” force.  So with that in mind, I think it’s a VERY bad idea to cut them out of a deal.  My goal is to establish a reputation among brokers that it is a positive, easy, and PROFITABLE experience to send folks to me for a  deal.  Beyond the obvious that you are cutting your own throat when you fail to pay your sales team, it is also unethical to do so.

That being said, things are rarely black and white.  The world is full of shades of grey so you need to look at situations individually.  Here are a couple situations where I would consider doing business outside an exchange with contacts who are in my exchange network:

• Business started outside the exchange
  If you are doing business with someone in your barter network, where the original contact did not come from your exchange, I see no problem working with them directly for cash or barter or even cash & barter.  If the sale did not originate with a lead from the exchange all bets are off.  For example, I have a long time client that we did cash business for years, then later on we realized that we are both in the same barter exchange.  I see no problem continuing to deal with them directly or even doing a part cash part barter deal with them (that might be normally prohibited by my exchange).
• Long term vs. short term
  I have a vendor that I found through my barter exchange and it turned out that he wants some of my services directly.  He wanted to work directly and totally cut out the exchange to save the commission fees.  After much conversation, I agreed that if our first job was run through the barter exchange, I would be willing to do some work on direct trade after that.  My goal is for this to be a long term vendor and I fully expect that after a relatively small amount of direct trade we’ll be back to 100% through the exchange.  My reasoning in making this deal was two-fold.  Firstly, much like an outside sales person, I don’t think it’s reasonable to always expect that a commission will be earned from every sale that is ever made with a client that a salesperson brings in.  Often sales people earn their commission is on that first sale only.  In this case, the exchange will be earning for the first sale and (most probably) many more down the road after the direct deal is done.  Secondly, I had to look at the “greater good” here.  It seemed quite likely that the whole deal would fall apart if I didn’t make some kind of a concession to this vendor.  The exchange would have earned nothing if I hadn’t agreed to do some trade outside of the exchange.

As usual, please feel free to post back about your experiences with this issue.