Barter exchanges help you by acting as a broker hooking you up with potential barter partners.  They make their living by charging a commission on each transaction (usually around 5-6% per transaction).  Because there is a transaction when you earn barter credits and a second transaction when you spend them, you end up paying a total commission of 10%-12% in cash on your barter.  If you trade a lot (like I do) then your monthly bills from your exchange can be substantial.  That being said, I do not begrudge them their fees.  They earned them.  Honestly I look at my exchange like an outside salesman.  I will happily pay a salesman a 15% commission on any business that they bring to me so really my barter fees are a deal to me.

That being said, I have found that there are many barter members who REALLY don’t like paying their transaction fees.  Because of this they often look for ways to rationalize why it’s OK to cut out their exchange from transactions and steal their fees.  The most common excuse I hear is that members feel it’s fair to pay their exchange on an initial transaction when they first introduce a new barter partner, but if they continue to trade on an ongoing basis, they don’t feel that it’s fair for the exchange to earn fees for doing “nothing.”  I understand this point of view, but if you want to conduct business in an honest and moral way the decision is quite simple:  What does your agreement with your exchange say?  If it says that you are not to barter directly with members that were introduced to you through the exchange, then you should not.  If your agreement with your exchange does not include that stipulation then you are free to trade direct.  If you have an agreement that you do not like, then certainly feel free to renegotiate or cancel the contract you have with your exchange.

Bottom line:  Your barter exchange is a great asset to your barter business.  Treat them well and pay their bills happily.  Cutting corners to short their fees is the same thing as shorting your employees part of their wages.

After bartering for a while it occurred to me that my trade profit was significant and that I really should be tithing at church on the profit that I’m earning on trade.  For a couple months I started tracking my trade profit and tithing cash for it.  It didn’t take long for me to realize that I hadn’t come up with a good solution.  I simply couldn’t afford to keep paying out cash tithes on barter profits.  I’ve spoken with a couple people and have come up with two potential solutions:

The easy solution is simply to set your church up with a barter exchange account and tithe in barter credits on the barter portion of your profit.  The problem I have with that solution though is that it puts the burden of managing the account and figuring out what to use it for on your church.  I don’t know about other churches, but the staff at my church already have plenty on their plate and really didn’t need another job added.

My solution is more work for me, but I think it’s the best way to go.  I contacted my Pastor, and let him know the situation.  I explained to him that I wanted to tithe on my barter profit, but I simply couldn’t do it in cash.  We agreed that we would both watch for things that the church needed that could be purchased on barter and that I would then take care of those needs based on records I was keeping with regard to what I needed to tithe in barter.  This way it doesn’t put any new work on church staff and at the same time, I don’t need to tithe cash on barter profits.

From time to time I’ve had folks tell me that bartering within a particular industry is “not allowed.”  Usually the person I’m talking to will vaguely refer to the IRS, the SEC or some other regulatory agency without any specifics.  Not satisfied with this, I’m trying to track down some hard facts and here’s the first area that I’ve nailed down.

Based on my research it appears that bartering for psychotherapy services is NOT in and of itself illegal, however it does raise some serious ethical issues and could quite possibly be against the ethical code for some professional organizations in the industry.  The concern here is that a patient/therapist financial relationship needs to be extremely strait-forward so as not to allow for the possibility of the patient to be taken advantage of due to the therapeutic relationship.

In California (where I am) the primary concern of the Calif. Bd of Behavioral Sciences and the Calif. Assn of Marriage and Family Therapists (CAMFT) is the issue of “dual relationships”.

1.2 DUAL RELATIONSHIPS-DEFINITION: Marriage and family therapists are aware of their influential position with respect to patients, and they avoid exploiting the trust and dependency of such persons.

Marriage and family therapists therefore avoid dual relationships with patients that are reasonably likely to impair professional judgment or lead to exploitation. A dual relationship occurs when a therapist and his/her patient engage in a separate and distinct relationship either simultaneously with the therapeutic relationship, or during a reasonable period of time following the termination of the therapeutic relationship.
Not all dual relationships are unethical, and some dual relationships cannot be avoided. When a concurrent or subsequent dual relationship occurs, marriage and family therapists take appropriate professional precautions to ensure that judgment is not impaired and that no exploitation occurs.
1.2.1 UNETHICAL DUAL RELATIONSHIPS: Other acts that would result in unethical dual relationships include, but are not limited to, borrowing money from a patient, hiring a patient, engaging in a business venture with a patient, or engaging in a close personal relationship with a patient. Such acts with a patient’s spouse, partner or family member may also be considered unethical dual relationships.

The former legal analyst for CAMFT, Richard Leslie,  adds to this in a recent article:

Do not permit the patient to pay for therapy by rendering personal services to you (e.g., fixing your car, landscaping, cleaning your house, editing a book, giving a massage, cutting your hair). Do not permit the patient to barter for therapy with items of subjective value (paintings, sculptures, hackies, collectibles).

Even barter of items with an objective value (cord of wood, bag of horse oats) may present difficulties. While the barter has a fixed value, the trade of it may entail meetings outside of session or meetings at the patient’s or therapist’s residence.

Ultimately it appears that it is up to the individual therapist to determine if they feel that bartering for services constitutes an unethical dual relationship.  I can see both sides of the issue on this one.  From the one point of view, if the specifics of a barter are determined before the therapeutic relationship starts and the terms of the arrangement are as strait-forward as a cash relationship (as they should be if the barter was conducted through an exchange) then I really don’t see a problem here.  That being said, my friend who is a therapist and helped me with this research did not feel that barter has a place in his business.  He feels that patient/therapist relationships must be so squeaky clean that all possible grey areas are to be avoided.

Added 9/27/10
Here’s an article on the topic that appears to be very well thought-out:  http://www.zurinstitute.com/bartertherapy.html

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 Test 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 wholesale jerseys from your exchange, I see no problem working with post 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 on doing a part cash part barter deal with ?bn 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 Publications 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 cheap nba jerseys expect that after a relatively small amount of direct trade we’ll be back to 100% through cheap jerseys 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 on salesperson brings in.  Often sales people earn their commission Coffee is on that first sale only.  In this case, the exchange will be earning for the first sale and (most probably) many wholesale mlb jerseys 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.