The Barter System

by Pallas Hutchison

The barter system has been around for a long time and can be a useful way to build networks within a community. However, if terms are not clearly defined beforehand, it can sour long-standing relationships. This is something I learned the hard way. I have been on both sides of a bad bartering agreement. I will share some of my experiences as well as a few things to consider before offering to barter with someone.

Know the parties involved. How many people are involved in the bartering agreement? Are you bartering with a business or with an individual? Overall, it's easier to barter with an individual. When bartering on behalf of my business, there are more variables to consider and less flexibility in the terms I can offer. I had a friend provide services to my business while I was providing massage services to them. Additionally, they had received services from my then-boyfriend's business as well. The friend's assumption of a barter between the three businesses made settling the bills awkward and unpleasant for everyone involved. The friendship took a long time to repair. To avoid this problem in the future, my business no longer accepts barter as a form of payment.

Bartering as an individuals is simpler and can be a lot of fun. One simply decides whether or not they want what you are offering in exchange for the service/product you would like to receive. As a massage therapist, I have a highly desired skill that not everyone is willing (or able) to pay for with money. However, there are plenty of things people have offered me in lieu of financial payment. Some of the ones I have accepted include fresh lobsters and shellfish from a fisherman, lawn mowing, babysitting, and horseback riding lessons. These massage services are usually provided outside of my business hours and using my massage table at home instead of my business's.

Know the terms of the agreement. Make sure the terms are discussed and agreed upon before anything services are provided or products change hands. Are you bartering cash value for cash value or time for time?  Different services have different prices even though the time elapsed remains the same. For example, the cost of a yoga class is less per person because a yoga teacher provides a service to multiple people at once; a massage therapist provides a service to one person at a time, which increases the cost per person per hour.

I used to barter services with my hairdresser but because we didn't clearly define the terms, the service I received varied each time while the service I provided remained constant. Because of this inconsistency, sometimes I felt like I received a fair trade and other times I felt that I gave more than I got or visa versa. I'm sure it evened out in the end. While I still use the same hairdresser, we're both happier when we pay each other outright for services received.

Martial arts has become difficult for me to fit into my current budget. My sensei has offered to barter my classes in exchange for massages for his wife. The cost of martial arts classes per month is $65, which is the equivalent of the massage program offered by my business. However, she would receive one 60-min massage per month and I would be receiving two 60-minute classes per week. The time does not equal out although the money does. Is this worth risking the relationships I have with my sensei and his wife? Transparency in the agreement will reduce the risk of fall out.

Despite the complications involved, bartering can be a lot of fun. It can be a great way to pack in experiences without sinking the budget. Figure out what you have to offer and what you'd like to try. Discuss terms openly and enjoy!