The pandemic has prompted many people to get inventive about obtaining the items and services they need. For some, that means swapping with friends, neighbors and even strangers.
Bartering eliminates the need for cash. It’s an arrangement where individuals — or businesses — directly trade goods and services without any money changing hands.
Olivia Mercer, a photographer in Tampa, Florida, has long enjoyed trading services with friends. Last year she launched a Facebook group to promote exchanges within her local community.
“With so many people losing work… a lot of folks are really short on cash,” Mercer said when the pandemic began.
She wanted to help people in her area connect and swap with one another.
There are many things you can barter, even while social distancing. It might be a straightforward product swap, such as trading office supplies for kitchen tools. Or you could trade a service, for instance, doing grocery shopping and delivery for a neighbor who agrees to prepare a couple of casseroles for you in return.
Although bartering is an age-old economic practice, it has seen renewed interest during the COVID-19 crisis.
In Las Vegas, a café owner exchanged coffee beans for freshly baked bread and wine. A man in New Hampshire swapped eggs for flour and ended up forming a 2,000-member barter community. Bartering is turning into a practical way to obtain necessities during these difficult times.
Advice for Bartering
If you’ve never traded goods or services through bartering, start by considering what you can provide and what you require.
You’ll also want to think about who you’ll trade with. A simple starting point is with people you already know.
Consider family, friends, colleagues, neighbors or other contacts in your social network. The barter can be a direct arrangement between two people — like giving eggs to a neighbor in return for paper towels — or you can create a group, like Mercer did.
If you’re setting up an informal barter exchange with multiple participants, decide where communication will happen. Will you post needs and offers in a group text or email? Or will you use an online forum, such as a Facebook group, or an app like Nextdoor? (You may find existing barter groups on those platforms you can join.)
You might open the exchange to people you don’t personally know, but it’s smart to set boundaries on membership. Mercer said she limited her group to the Tampa Bay region so it would be convenient for members to provide local services, like trading a portrait session for a haircut and color from a neighborhood stylist.
You can also coordinate a swap through Craigslist or a specialized barter site like BarterQuest. Barter Network and BizX are examples of business-to-business barter platforms.
Some barter platforms operate with a kind of barter currency — a points-based system — where you earn credits for what you provide instead of doing a direct one-to-one trade. TimeBanks follows this model by giving “time credits” for services you render. You then spend those time credits to receive services from others in the network.
Before you agree to trade with someone unknown, vet them by requesting references (if they’re offering a service, like virtual tutoring) or a sample of their work (if they sell something they create, such as graphic design).
What to Watch Out for When Bartering
To make bartering work, both parties should be fully aligned on the exchange. The goods or services swapped ought to be of comparable value or time investment.
Write the agreement down and have each person sign it to confirm they’ll meet their obligations. Include a deadline for when the product or service will be delivered.
“Be clear about what each of you is getting,” Mercer said. “Lots of upfront communication helps prevent issues later.”
Follow social distancing rules when carrying out your exchange. Arrange porch pickups and doorstep drop-offs. Stick to services that can be provided online or without physical contact.
Even though no cash is exchanged, be aware that the IRS treats bartering as taxable income, which you might need to report on your tax return. Typically, this doesn’t apply to individuals who casually swap comparable services on a noncommercial basis. Still, if you’re a small business owner trading services with another entrepreneur, speak with an accountant.
Sara Thompson is a senior writer at Savinly.
