The pandemic has inspired many people to think creatively about what goods and services they need. For some, that means bartering with friends, neighbors, and even strangers.
Barter eliminates the need to use money. It is an agreement whereby people – or companies – exchange goods and services directly without making monetary transactions.
Jessie Stehlik, a photographer based in Tampa, Florida, has always enjoyed bartering with friends. Last year she started a Facebook group to promote commerce within her local community.
“Since everyone loses their job … a lot of people are really in need of money,” said Stehlik at the start of the pandemic.
She wanted to be able to help the people of her city connect with one another and do business.
There are all kinds of things to trade, even in times of social distancing. It could be a simple product trade, like swapping office equipment for kitchen equipment. Or you can trade in a service like shopping and delivering groceries to a neighbor who will agree to make a few casseroles for you in return.
While barter is an ancient economic system, it has resurfaced amid the COVID-19 pandemic.
In Las Vegas A coffee shop owner traded coffee beans for freshly baked bread and wine. A New Hampshire man traded eggs for flour and created an exchange group with 2,000 members. Barter is becoming a solution to get things you need in this challenging time.
If you’ve never bartered goods and services before, consider what you can offer and what you need first.
You also need to consider who you are going to trade with. An easy way is to start with people you know.
Think of family members, friends, co-workers, neighbors, or others in your social circle. The exchange arrangement could be a direct request between two parties – like giving eggs to a neighbor in exchange for paper towels – or you could form a group, like Stehlik did.
When setting up an informal barter with multiple people, you need to decide where the communication will take place. Will you be soliciting needs and offering goods and services in a group text or via email? Or use an online forum like a Facebook group or app like Next door? (There may already be swap groups that you can join on these platforms.)
You can also open up the exchange to people you don’t know personally. However, it is advisable to set some restrictions on eligibility. Stehlik said she restricted her group to the Tampa Bay area so people could easily offer their services, such as swapping a photo session for a cut and color from a local barber shop.
Some exchange networks are set up so that you earn some sort of exchange currency – like a points system – from what you offer, rather than having a direct exchange of goods or services. TimeBanks In this way, “time credits” are issued for the service you have provided. You then use your time credit to receive services from others on the network.
Before agreeing to trade with someone you don’t know, be sure to check them out by asking them for recommendations (if they offer a service like online tutoring) or for an example of their product (if they offer something that he created), like graphic design).
What to consider when bartering
For a successful barter, it is important that each party fully agrees to the exchange. The goods or services exchanged should be of similar value or time.
Write your agreement in writing and make sure each party signs it to certify that they will meet the end of the deal. Include a time frame for the item or service to be delivered.
“Make sure it’s clear what you get from each,” said Stehlik. “A lot of loving communication right from the start makes people less prone to problems in the end.”
When conducting your exchange, follow social distancing guidelines. Schedule pickups on the porch and deliveries to your doorstep. Stick to services that you can offer online or without contact with others.
Although money doesn’t exchange hands, it is important to know The IRS is considering barter as a form of incomeyou may need to report when filing your tax returns. This generally does not apply to individuals exchanging similar services informally on a non-commercial basis. However, if you are a small business owner providing trading services with a co-entrepreneur, you should seek help from an accountant.
Nicole Dow is a senior writer at The Penny Hoarder.
This article originally appeared on www.thepennyhoarder.com