The Return of the Barter Economy, Swapping Eggs for
Toilet Paper
(Bloomberg) -- Since the beginning of March,
unattended folding tables have begun popping up at
intersections and the end of people’s driveways,
offering everyday goods like rice, a jar of jam or
bread. Take what you need and leave what you can, the
signs say.
Barter, the trade system prevalent in the Middle
Ages, is back in the time of coronavirus pandemic,
with a modern twist.
Social networks Facebook and Nextdoor are flooded
with posts from neighbors and friends seeking to swap
eggs for toilet paper. Small and midsized businesses,
whose cash trade has dried up from the economic
fallout of shelter-in-place orders, are turning to
online barter exchanges.
“When cash is extra tight, it behooves us to buy as
much as possible on trade,” said David Yusen,
director of business development for Seattle-based
Heavy Restaurant Group, which recently bought 56
cases of Malbec wine for $15,000 worth of barter
credits. The company’s 10 restaurants have closed,
but some locations will start offering pick-up and
delivery this week. “It saves us money, it helps cash
flow.”
In normal times, the roughly 200 barter exchanges in
the U.S. let roofers fix leaks and get paid in
restaurant takeouts or accounting services. With tens
of millions of Americans under lockdowns, those cash-
free trade systems are seeing an influx in
participants.
The International Reciprocal Trade Association
represents 100 barter exchanges, each catering to
thousands of businesses. Some exchanges reported a
20% to 35% increase in member signups in March, said
Ron Whitney, president and chief executive officer of
the group, known as IRTA.
“These are challenging times for us, but it also
represents an opportunity for us,” Whitney said. An
estimated $12 billion to $14 billion barter trades
take place a year, according to IRTA.
Roger Becker owns home building and remodeling
companies in Puyallup, Washington, the state that saw
the first outbreak of the epidemic in the U.S. He
expects business to drop by at least 30% this year,
and signed up to the barter exchange BizX in
February.
“A couple of months ago, I never would have thought
of it,” Becker said. “It’s going be a game changer,
because we are all starting to get pretty fearful
about people tightening up their pocketbooks.”
Here’s how it works: Becker recently poured in
$260,000 to remodel a 4,000-square-foot home in
Leavenworth that was listed for $1.2 million. He is
willing to accept a portion of the home’s price in
so-called BizX dollars from the barter exchange, and
will use these credits to buy services of other
exchange members -- plumbers, electricians or
nurseries -- so he can build and remodel other homes.
BizX, based in Bellevue, Washington, said its website
traffic is up 30% just in the last few days. At
International Monetary Systems in the Milwaukee area,
traffic has doubled in the last two weeks compared
with a typical full month. In Pittsburgh, exchange
Green Apple Barter has seen a 20% rise in its
membership in March, said President Justin Krane.
“A supply yard who has inventory sitting on the lot,”
Krane said. “They asked, ‘Could you move inventory?’
A hotel property just got involved -- their occupancy
rate is really getting hurt right now. Joining a
network is going to give them another way to fill
hotel rooms.”
Read more about small business:
In Just Hours, America’s Family Businesses Hurtled
Into Limbo
Stay-Home Decrees Crush Small Business, Erasing
Millions of Jobs
Bartering between consumers is ramping up as well
after people cleared grocery-store shelves and
hoarded supplies at home. For now, it’s still being
treated as a joke. A Twitter poll asked how many cans
of beer a single roll of paper is worth (two or three
cans was the most popular answer).
Laughter aside, barter of household items and food
could more than double this year in the U.S., from $4
million to over $10 million, according to Richard
Crone, CEO of payments expert Crone Consulting LLC.
Bartering has become especially popular with people
who are most at risk to have severe forms of the
highly contagious coronavirus and want to avoid
stores.
Chell Garvin of Springfield, Missouri, 50, saw a post
from a friend on Facebook who said she scored an 18-
roll pack of toilet paper. Garvin contacted her, and
exchanged an 18-count carton of eggs for two double
rolls. She “cooks a lot, and she said she can’t find
eggs anywhere,” Garvin said.
Allie Walker-Lavette, a 55-year-old living in
Jacksonville, Florida, recently got a delivery of
eggs -- an item her daughter had been looking for in
vain. Walker-Lavette swapped a carton for an order of
margaritas-to-go from a local restaurant.
If supply-chain shortages continue, “I do have a
couple neighbors close by, I know I can come to them
and say, ‘What do you have in your fridge?’” she
said.
Grocery stores have said that shortages of supplies
like toilet paper are only temporary. Still, Crone
expects that the shortages could potentially give
rise to new swapping consumer apps and marketplaces.
“There’s demand for products that aren’t on store
shelves but are in people’s pantry or garage or
second freezer,” Crone said. “What Uber did to enable
a bunch of idle capacity with cars, this does this
for the packaged goods supply chain. It’s a whole new
supply chain.”
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