Survival 101: The Benefits of Bartering

In 1852 when Jacksonville, Oregon was quickly becoming the largest city between Portland and Sacramento and the sights and sounds of the gold rush flourished, locals were busy trading goods and services. From barn raising's to trading at the mercantile, the Rogue Valley was built on the system of barter and the tradition holds strong to this day.

Chances are good that you already barter on a regular basis. If you swap babysitting with a neighbor, or trade car-pooling responsibilities, then you already know a great deal about how bartering works.

Rosalva Chamberlain of Medford trades the use of her car for groceries. "This works well for both of us", she says. "I'm glad to help a friend who doesn't have a car and she picks up groceries for me in return. We both come out ahead." Trading goods or services for things we need or make our lives better makes sense and can help stretch our family's budget.

As unemployment has increased in Jackson county, bartering has become a necessity in some households. As one local said, "Those folks, who the media say have stopped looking for work, bartering is how they have survived." From trading haircuts for the use of tools or cleaning carpets for landscape design, the possibilities are limited only by our skills and our imaginations.

A vibrant underground world of trading exists and most of it is done quietly. Individuals are supposed to declare bartering exchanges and pay taxes on them, but either people largely do not understand this, or prefer to sidestep the laws. As a result, many transactions are not reported, which is no surprise to the IRS. The agency changes the tax laws on bartering on a frequent basis.

According to BXI Exchange, one of the oldest and largest bartering exchanges in the country, an estimated 400,000 businesses use bartering to increase their profits. More than $9 billion in sales are conducted annually. Networking groups generally have some fees involved and clients use "trade dollars" or "units" of trade.

Locally, many businesses and non-profits use bartering network groups to facilitate trading. Karyn Mitchell of Compasscard, which has a significant local presence, says about 570 businesses in Southern Oregon trade through them. "Bartering is especially geared toward small business owners," says Karyn. "For example, if a local bar owner needs upholstery work done, she can trade for it rather than resorting to paying cash. Of course this helps her business succeed."

Even non-profits are trading. Jodi Yapp, the director of Computers 2 Kids says she "trades skills for skills. We offer computer classes in trade for services. For example, 25 hours of computer classes would trade for 25 hours of skilled labor. And if a kid needs a computer, a parent can trade hours in exchange for it. It's a win-win situation."