We recently had an unfavorable experience with a barter association here in the D.C. area that both runs a local exchange and franchises nationally. They simply take whatever they want from members' businesses, crediting the members' accounts with the asked-for trade dollars. Their exchange has a total positive balance of more than $1 million. Divided by 600 members, this comes out to about $1,500 that each member has put into the system in the form of goods or services. Whether the member can redeem the trade credits depends on the whim of the exchange. To redeem the trade credits, you must call the exchange and ask for the goods needed. Most likely, you won't get what you asked for.

EDITOR-NOTE:

Mr. Mamis replies: However a barter system may arrange for a member's credit -- whether through script or a computer printout -- is incidental. More to the point, the article did warn that a business should be prepared to "trade out immediately," as Mr. Frank apparently failed to do. Before entering in to any barter situation, a business should also be aware of what types of goods or services are available in trade. Furthermore, not only is untapped credit carried at risk (the barter exchange may go bankrupt), but it is also not earning interest as it would in a cash economy.