Bartering Makes A Comeback Amid Tight Times

The economic slowdown has meant that many businesses are having to get creative to stay afloat. And an increasing number are turning to a mode of trade that's ancient: bartering.

Josh Gardner owns a Connecticut company called "The Jar Store" that distributes glassware and candle-making materials. He says he's seen a drop-off in sales since the economy worsened, and that a lot of his clients — small-time candle makers and specialty food providers who use his glass jars — have been going out of business.

That's when he heard about bartering.

"When I first heard it, I laughed," Gardner says. "I couldn't understand it that we had gone back to some archaic, literally pre-Babylonian exchange mechanism. I picture like two shepherds trading goats for cows in like northern Nepal."

Despite the fact that his business involves no livestock, Gardner was persuaded by his friend Debbie Lombardi to give bartering a try.

Lombardi owns Barter Business Unlimited, a barter exchange just down the road from Gardner's warehouse in Bristol, Conn. She's sort of like a business matchmaker — finding one client's service that meets another's needs.

Here's how it works: A company opens something akin to a bank account where it can build up bartering credits.

For instance, Lombardi says, if Gardner sells $5,000 worth of jars to a new client such as a florist, he wouldn't have to take flowers in return. Instead, he can take services from other companies in the exchange, such as payroll services, vehicle maintenance or Web site work.

That way, Gardner can cover some of his expenses without having to use any cash — something that he and others have found attractive amid a national credit crunch.

The International Reciprocal Trade Association, which tracks the barter industry, says barter transactions are up as much as 25 percent. While bartering is taxed the same way as cash, Lombardi says the recession is making converts out of people who had been skeptical about bartering to sustain their business.

"Time gets tight and your warehouse starts to fill up, or your guys aren't working and they're on the payroll — you know, you start to look for other alternatives," Lombardi says. "So our phones have been ringing off the hook."

She makes a commission on everything bought through Barter Business Unlimited. And she's seeing everything from restaurants turning to barter as a way to fill increasingly empty tables, to a surge in real estate listings.

"I've never seen this, and I've been doing this business 22 years," Lombardi says. "I have never seen someone come to me and say, 'I'll give you a million-dollar property and I'll take $500,000 down in barter.' Never happened."

There's another trend Lombardi is seeing for the first time: People such as dentists and other service providers sending their delinquent customers to her to see if there's something they can barter away in lieu of paying their bill in cash.

And when it's a choice between going into collection or making a trade — barter looks like a pretty appealing way to do business.

Tina Antolini reports from member station WFCR in Amherst, Mass.