Many barter exchanges issue scrip that can be used at restaurants that are in the exchange. Often they come in 10 dollar increments and they have a spot on each to enter your name and the name of the restaurant where you are spending the scrip. Filling out 10 of these for a $100 tab is a pain and in the past I never could see a good reason why I should bother. Well let me tell you….I do now.
Recently I got a call from my broker. She was asking about some script that had been dumped on a local restaurant that doesn’t accept regular barter scrip. Apparently the customer dropped the scrip on the table and hit the door before the owner realized what happened. Here’s the kicker though…the scrip has a tracking number on it and it was scrip that I purchased from my exchange. What’s even more amazing is that the scrip was used at the bar and I haven’t tasted alcohol in over 10 years! After a bunch of calls and emails my broker and I are pretty sure we figured out what happened. What we suspect is that I spent the scrip in a legitimate transaction with a local restaurant that accepts the the scrip, but I didn’t fill out the form on the scrip. I left it blank. Then the owner of the restaurant probably gave it to a friend or staff member who then, not knowing how the scrip is supposed to be used, dumped it on an unsuspecting restaurant that doesn’t even accept that type of scrip as payment. Lucky for me, my broker knows and trusts me and she believes me that it wasn’t me who did the “dining and dashing.”
By at least putting the restaurant’s name on the scrip when you spend it, you can ensure this will not happen to you. Once that restaurant’s name is on the scrip, only they can turn it into the exchange for credit. That is important because it protects you from being blamed when/if someone else abuses the scrip by spending it the wrong place or by not paying the tip/tax in cash as they should. Also by filling out the scrip you insure that your exchange will get their appropriate transaction fee.
So the take-away here is to fill out those blanks on your scrip. I know it’s a pain, but it’s worth it! I learned the hard way.
When a barter exchange has a limited volume of a highly desired product/service, it’s not unusual for them to limit the amount that each member can purchase. If asked about this policy the exchange will usually explain that this is a service to their members, allowing as many members as possible a chance at the “good stuff.” Although this is a reasonable goal I have run into troubles with these policies both as a buyer and seller. Here are some examples of times when exchanges should adjust their metering policy:
- Metering barter sales can encourage cash/barter deals. For example, if I want to send my 3 kids to a summer camp and can only barter for half the needed amount then I’ll end up spending cash on the rest. Even worse, it encourages sellers to use barter as a way to bait and switch barter members to get them to spend cash.
- As a seller, my primary interest is bartering my products as efficiently as possible. Fewer, larger purchases are more profitable than many smaller purchases. I would much rather ship out one large box than 20 small ones to sell the same volume of product. I have seen times when sales of an item are metered by the exchange w/o consulting the seller.
- If you personally recruit a member into an exchange it would be wise for the exchange to exempt you from any metering of that member’s services for the life of your mutual memberships. That is because there would be no “good stuff” to share with the membership if you had not brought the new member into the exchange in the first place. Furthermore, by not allowing you to purchase the full volume that you desire, the exchange is encouraging you to direct barter (where there are no artificial limits) with new potential members instead of bringing them into the exchange.
To wrap up I should mention that I do understand the value of metering high value products/services, however it should be done very carefully. It is easy for an exchange to come off heavy-handed with policies like this which is a major turn-off for all members.
I’m having a barter Christmas around my house this year…kinda. As it was getting toward Thanksgiving my wife mentioned to me that we had a bunch of Christmas decorations that we don’t use any more and this would be an ideal time to post them on ebay. Of course this was a brilliant idea and over the next couple weeks I posted several hundred dollars worth of items. As they sold I directed people to pay me via paypal and the cash funneled in to our account.
On the opposite end of the spectrum I started shopping for some presents for my family and usually I find the best prices on ebay. When I found what I wanted I payed using the funds that were already in my paypal account. It was beautiful. Of course what I did wasn’t really barter, but it felt pretty close to me. What I did really is essentially what we do when we barter; we give someone else something that we don’t need and get something back that we want. Best of all I didn’t have to fork out any pre-existing cash for my gift purchases.
It’s extremely important to take good care of your restaurant barter partners and part of that is making sure you leave appropriate cash for tip/tax. When you are paying with $10 increments of script issued by a barter exchange, figuring out exactly how much you should leave in barter and how much should be in cash can get a little complicated. A while back I posted some instructions on (what I thought was) a good way to calculate the tip. I have a new and MUCH BETTER, SIMPLER rule of thumb. Check it out:
- Always overpay for the meal in barter
- Leave 3 times the tax in cash
That’s it! Is that easy or what!!?? Here’s a practical example: Let’s say you get your bill and your total is $28 for the meal plus $2.24 tax.
- Pay $30 in script (overpaying the $28 meal bill)
- Leave around $7 in cash (approx 3 times the tax)
The only exception to this rule is if the bill is only slightly over a ten dollar increment. For example, if the bill was $32, I would then leave $30 in script (not overpay) but when it comes to leaving the cash I’d leave 3 times the tax PLUS the $2 I didn’t pay in barter. BUT….if you want to keep it simple, you are ALWAYS safe to overpay the meal in barter and triple the tax in cash.
OK….say it with me people: Overpay the meal in barter and triple the tax in cash!!!
Remember I posted a rant a few months back about how irritating it is that drug dealers keep trying to barter pot on craigslist? Check this out:
OK … somebody has to say it so I guess it might as well be me. Stop whining about paying your barter exchange commissions!
Don’t get the wrong idea. I’m a fellow trader like most of you. I do not work for a barter exchange. I’m just tired of hearing complaints from barter exchange members about paying transaction fees. Here are my reasons why you should pipe down and smile when you pay your bill to your local exchange.
- You should have known about the commission structure before you signed up. If you didn’t, then shame on you and the exchange. You have a responsibility to know what you are committing to before you sign up.
- Barter should be a profitable thing for you. If it isn’t, you shouldn’t be doing it! With that in mind, you should recognize that your commission fees are directly proportional to your usage of the exchange’s services. That means it’s a GOOD THING when you get a bill from your exchange. It means you are using the service and making money with it.
- Exchanges are for-profit businesses. If they don’t collect commissions they are out of business and you will have to find all your barter partners on your own.
If you are new to barter and have no idea what I’m talking about here, please check out my barter basics page.
I’ve got an open slot for a new advertiser. 100% barter (IMS, UC, or make an offer). Please contact me if you are interested.