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Why Bartercard is a waste of time and money [warning]

Why Bartercard is a waste of time and money

Because Bartercard increases turnover, many business people take a long time to realise the tangible and intangible costs that go along with marketing in the barter economy.

This morning I had a phone call from a polite and enthusiastic sales rep from Bartercard. As I was a member of Bartercard offering web design services some years ago, I know a reasonable amount about how it works. However, every time a sales rep from Bartercard calls me, I’m always amazed by how little they understand the actual cost to the members. I thought it was time to put out a few warnings about the downside of Bartercard.

Note: There have been a lot of comments added to this blog. Some are from customers both happy and unhappy. There are also comments from people who have worked inside Bartercard itself. Please feel free to add your own Bartercard Reviews at the bottom of the page!

For those of you who don’t know anything about Bartercard, it’s a system that a business can join to “trade” with other members of Bartercard. A business will normally be given a line of credit worth T$10k – that’s 10,000 Trade dollars. The business then goes and spends this line of credit, incurring fees. These fees are as follows;

  • 5.5% transaction fee on any sale or purchase in cash (real money).
  • 1% transaction fee on any sale or purchase in Trade dollars.

The business then accepts purchases in Trade dollars from other Bartercard members for their goods or services and so the cycle continues.

Something that is important to note is that nowhere on the Bartercard website are these fees listed as part of the information available to a prospective member. The only reference I found to them was a couple of obscure articles from 2009. You can verify this yourself by doing a search like this on Google: “site:nz.bartercard.com 5.5%” – or just click that link.

At this point, you might be thinking that the fees don’t sound too bad, if you can get some extra business that you wouldn’t otherwise get? However, the catch isn’t just in the fees. The real cost of Bartercard is in other factors both tangible and intangible. Let’s cover a few of the benefits that Bartercard claim and see how they stack up. Remember that these are my personal opinions and not everyone will have the same experience with using Bartercard that I had. If you just want to get to the nitty-gritty, head down to “What’s the real cost of Bartercard?”.

Barter increases sales
Bartercard has over 7000 members in NZ, so this is certainly true. When I was using Bartercard, we took over $30k in extra business in a year.

Barter improves cashflow
This claim, I don’t agree with at all. In fact, I don’t see how making sales with greater fees and increased costs for something that isn’t real money, can improve cashflow. In my experience, it was a significant drain on cashflow. I see how Bartercard try to make this claim but it just doesn’t stack up.

“Cash savings are the primary benefit of barter. Barter allows you, as a business owner, to pay for what you need with your own goods or services, allowing you to preserve working capital for other expenses.” 

Not in my experience. Most people I’ve spoken to who use Bartercard struggle to find ways to spend their trade dollars as a business expense.

“When you use barter, instead of cash, to purchase needed goods and services, you reduce your cash costs by paying for them with revenue generated by incremental barter sales.”

“Bartering helps reduce cash outlays for overhead costs. Many of the services offered through barter — such as accounting, cleaning, gifts, restaurant dining and travel — relate to overhead costs. Obtaining these overhead services through barter rather than writing out a cheque saves you cash.”

This doesn’t really make any sense. A cost is a cost, whether or not it’s cash is irrelevant. In fact, with fees, it’s actually costing you more.

“Making purchases with your Trade Dollars means the payment is made with new sales – sales made by your exchange affiliation.”

Okaaay… but in reality, no one joins Bartercard because they’re already working at capacity. Bartercard is quite simply not as good as cash, so businesses who join Bartercard, tend to do it because they need more income. Trade dollars are not as liquid as cash, increase costs and come with other problems.

Barter moves excess inventory and fills idle inventory time

“Bartering also allows you to improve inventory management by converting excess products into valuable goods and services. If you barter, you avoid having to liquidate excess inventory through drastic discounting.”

This I do agree with, because if you look at it from a different angle, it highlights one of the main problems with purchasing products through Bartercard – they are often crap! Excess inventory exists because it didn’t get sold. The reason it didn’t get sold is possibly because no one wanted to buy it because it was over-priced, inferior or just that no one wanted it. This isn’t the case all the time but as anyone who is a member of a “points” program (I use Airpoints), the products often turn out to be not quite as good as you though they would be.

Barter can enhance productivity

“Barter helps companies put inventory, equipment and employees to good use, creating new revenue that would not have been available otherwise. That new revenue can be used to finance the purchase of new equipment, raw materials or services to support the business. Essentially, a company’s less productive assets are exchanged for more valuable goods or services through the help of a barter exchange.”

So what you’re saying is that we should trade our unproductive assets for someone else’s unproductive assets… hmmm. It doesn’t shout “quality” does it? See the next claim…

Barter can reduce non-performing assets

“Businesses with obsolete inventory frequently find that bartering the assets yields a much better value than liquidating it for pennies on the dollar. Instead, the company can sell the inventory to a barter member for trade credits close to the carrying cost or book value, and then apply those credits to other business expenses, such as marketing, entertainment, travel or raw materials. Exchanging an unwanted asset for something else of value helps recover a significant amount of incremental revenue that might otherwise have been lost.”

Quality is one of the biggest issues I had with Bartercard. Because the product or service being offered is being paid for with a Trade dollar and not real money, the provider tends to offer a lower quality product or service than you’d normally get if you were paying with cash. Prices also tend to be higher to compensate for the perceived lower value of the Trade dollars and everyone walks away wondering why they bothered in the first place.

Barter can reduce seasonality

“During periods when business is typically slower due to a company’s goods or service mix, companies can still strengthen their overall financial position by accepting trade credits through barter.”

Sounds great but again, the costs and difficulties are glossed over.

Barter facilitates new cash sales

“The key to sales success is referrals – word-of-mouth marketing. If you perform a good job for a client you serviced through your barter exchange, they will undoubtedly refer their cash-paying friends, clients, family and associates to you.”

The trouble is that it doesn’t work this way. What happens is that word gets around that there is a new Bartercard member offering a valuable service or product and they get swamped with other Bartercard members trying to dump their Trade dollars on them before they figure out what the “benefits” really are. Once I stopped using Bartercard, all the members that had been using my services evaporated into thin air to find the next sucker web designer!

Barter facilitates increased profits

“Sellers within a barter network make incremental barter sales (over and above their cash business) and increased sales mean increased profits. Additionally, the real cost of the goods or service you purchase on trade is actually the wholesale cost of your Trade Dollars earned (see benefit: Barter creates wholesale buying power).”

Bartercard have a habit of making what are some of the worst aspects of Trade dollars sound like a benefit. Yes, members may well have increased profits. What do increased profits mean? Tax. As Trade dollars are taxable just like any other income, the IRD will want their cut. If you haven’t managed to spend all your Trade dollars on deductible expenses (I was never able to), where is the cash gong to come from to pay for the GST and income tax? You guessed it, your normal cashflow. Remember how Bartercard was going to improve your cashflow? Yeah right.

Barter expands distribution channels

“Barter exchange members can cost-effectively expand their business market reach by marketing to the exchange network’s membership base. The larger the membership base, the better, as this provides a larger market and a far higher selection of trading options. Bartercard has a nation-wide and global membership of over 7000 New Zealand businesses, and over 36,000 around the world. This provides strong marketing and trading options through its national and global directory service, plus the national opportunities the eMARKETplace offers.”

Yes, it expands your opportunities to get more Trade dollars you can’t spend. Awesome.

Barter creates wholesale buying power

“With barter exchanges, the real cost of the goods you purchase on trade is actually the wholesale cost of your Trade Dollars earned. Making sales with built-in profits makes the cost of your purchases more economical on trade. When you join a barter exchange, you open the door to a new, cash-free way of handling everyday business and personal expenses.”

Does this make sense to anyone? If anyone can explain it, please register and post a comment because it just sounds like meaningless waffle to me.

Barter builds customer loyalty

“When one business is connected to another through barter exchange, the two businesses are connected by more than a simple transaction, rather a network. Businesses that routinely trade for goods and services will bypass competitors to deal with each other.”

Because no one else wants their Trade dollars! And if these two theoretical businesses had any brains, they would stop using Bartercard, avoid the fees and just use cash.

Barter gives you advantages over your competition

“Increased customer base, expanded geographic markets, additional sales, improved cashflow and increased profit, all facilitate increased advantage over your competition. Bartering through a trade exchange can assist a small business to portray the image of being a big business without the cash-costs incurred by much larger businesses. For example, barter enables businesses to execute additional marketing to gain more sales without spending cash.”

Bartercard are really big on making “spending cash” sound like something that dodgy people do in dark alleys. It’s a contradiction that is repeated over and over again. They are at pains to convince us that Trade dollars are just like cash but only better, funner and used by only those who are smart enough to step away from the fools who prefer cash!

What’s the real cost of Bartercard?

As I mentioned earlier, when I used Bartercard, we took around T$30k+GST (30,000 Trade dollars) in a year. What I’m showing here is the worst case scenario, not exactly what happened with us. For the sake of the example, I’m also assuming that we also spent all the T$30k in the same year.

In this example, all the Trade dollars are spent on personal, non-deductible expenses. In an ideal world, you’d spend all your Trade dollars on business expenses but we found this to be impossible.

The Bartercard cashflow drain

  • Bartercard Sales Fees (5.5%) – $1650.00
  • Company Tax (28%) – $8400.00 (it was actually 33% when I was taking Bartercard)
  • GST – $3913.04
  • Monthly Fees – $420.00

Total cash required to take T$30k is $14,383.04 – nearly half of what was taken. Remember that this cash has to come out of your normal operating cashflow. Using Bartercard actually means you need to earn even more cash in order to subsidse the Trade dollars that you take in. If Bartercard object to this calculation, I invite them to correct me on these figures.

  • The monthly fee, I set at $35. I couldn’t find the actual fee for NZ anywhere, so used the same fee as Bartercard Australia charge.
  • There are also other fees for directory listings and advertising but I couldn’t find any details on those either.
  • There is also the 1% T$ fee on all sales and purchases.

Yes, this is a worst-case example but it still highlights the massive cash drain that Trade dollars can have on your business. Even if you were able to spend ALL your Trade dollars on business expenses (and you’re unlikely to) so that you paid no company tax or GST on the income, there is still the question of the huge 13% total fees for transactions, plus other membership fees.

How these fees impact on Bartercard members in practice

Basic economics dictates that if costs are added to a transaction, prices will rise to accommodate that cost. I’m not just talking about the fees or tax costs either, there are other less tangible costs that find their way into the Bartercard economy.

Opportunity Cost
Taking Trade dollars means that you can only spend them on the goods and services available in Bartercard membership. Even with so many members, this significantly limits your options.

Inconvenience Cost
After taking the time to track down a business that will sell you what you want, there is no guarantee that they will take your Trade dollars. This happened to me a lot and when they were willing to take them, they often wanted to take part in cash. This was against Bartercard rules but it happened all the time.

Wasted Purchases Cost
As we became frustrated with our inability to spend this massive haul of Trade dollars that we were sitting on for business expenses, we started to buy things we didn’t really need, just to get rid of them. This took us into a false economy, where any benefits that did exist by using Bartercard were gone as we felt forced to waste the Trade dollars we did have.

Personal Purchases Cost
Because it is often so difficult to spend on business expenses, members tend to buy a lot of personal things instead. This immediate creates additional cash costs for GST and Income Tax.

Perceived Value Cost
This is probably the worst of all and is the real source of a lot of the problems with Bartercard. Due to all the above costs, inconveniences and difficulties associated with Bartercard, members (rightly) don’t consider them to be as valuable as real money. They adjust for this by raising prices or reducing value on Bartercard purchases. This is against Bartercard rules but it happens all the time. Wikipedia states that “Most independent forums (like Whirlpool.net.au) consider the value of 1 Bartercard dollar to be about 0.33c AUD”. That means your Trade dollars are only worth a third of the value of real money.

Why use Bartercard?

Given that there are so many downsides to using Bartercard, I’m amazed that so many businesses still seem to use it. The inherent and intangible costs are a huge barrier that only seem to be recognised by those who experienced them for themselves.

If you’re considering using Bartercard, don’t. Put those costs into marketing your business more effectively and get real cash income without all the added fees!

85 Responses to Why Bartercard is a waste of time and money [warning]

  1. asampwhaler says:

    Ok so reading through there seems to be a lot of negative about Bartercard. Everyone wants to talk about the negatives, we thrive on it, lets see how it has impacted real business…

    We trade approximately 2mill annually on Bartercard. Its easy to come by but you have to work to spend it. If your not prepared to put in the work to spend then it will not work.

    Barter decreases your cash expenditure. Yes you have to break loyalty with your existing supplier/client or as we have done suggest to your existing client/supplier they join Bartercard. Who’s business is more important, your’s or theirs. In times of recession you need to leverage your business as much as possible.

    We were able to turn $150k of dead stock into $300k of Barter in a matter of a month. This 300k went back into our business and was spent on advertising, brochures, signage, business travel, staff incentives, client incentives all areas we were previously spending CASH on… Funnily enough our international partners were thrilled to see such an ingenious idea and still do to this day.

    The second big thing Barter assisted with was manufacturing. Sales were down in the cash economy, but we lifted them up in Barter. We were able to keep some 20 extra staff employed during our worst times because the line kept rolling.

    We are one of only a few of our type of products available through Barter, do you think we are approached first over our even cheaper competitors, you bet ya! Members of Bartercard will always try and find what they are after on trade before spending cash, that’s the whole idea so yes, you leverage your business here also.

    In effect, is Bartercard not just another payment method that could be accepted by each and every business worldwide. Some businesses just don’t get it, and that’s fine, there’s more out there for companies that do grasp the concept. Yes there are fees involved. Call the fees advertising, its a direct cost, you know that the cost of advertising on every single product you sell is the % of cash fees… How many businesses wish they could know and better still predict their exact cost of advertising on a product each and every time you sell…

    If you can’t grasp the simple concept of Bartercard then stay put in the cash economy and watch sales and opportunities skip by. Bartercard told me when I first started that it will work for every business, just not every business person…Couldn’t be a truer word said as some of the previous comments prove.

  2. Dave Smyth says:

    Hi Aaron,

    Thanks for your detailed comments. Considered debate is always good. Yes, my post is predominantly negative but I can back it up, so let’s go!

    There’s a few things you mentioned that support the points I’ve made.

    1. You were able to move $150k of stock that you were unable to sell for cash.

    The obvious reason that you could move this stock for Barter Trade dollars and not for cash is that not enough people wanted to pay cash for it. As there are far more people with cash than there are people holding Trade dollars, we can say that the buyers using Trade dollars either consider them to be worth far less than cash and/or were desperate to get rid of them.

    2. Barter decreases your cash expenditure.

    Let’s be generous and assume the Trade dollars are all used for business expenses. But… so what? What does that really mean? It’s an empty statement Bartercard make as if it’s something good, when in fact it’s bad. I would rather pay $100 cash for something than T$100 (trade dollars), PLUS $11 cash fees to Bartercard, PLUS T$2 trade fees. How is paying (at least) 13% more than if you used cash a good thing?

    3. The second big thing Barter assisted with was manufacturing.

    It sounds like you’re referring to the unwanted stock that I covered in point #1. I admit that this is one area where businesses selling a physical product can benefit from Bartercard. If no one wants it and you can’t get cash for it, take trade instead.

    4. We are one of only a few of our type of products available through Barter, do you think we are approached first over our even cheaper competitors, you bet ya!

    Of course you are – dumping trade dollars is hard! People happily pay more for something when the currency they’re using is considered to be worth less.

    Finally… it’s easy to prove that Trade dollars are seen as being worth far less than real money. I believe you’re a Sales Manager for the company you work for, so your focus is on gross turnover rather than bean-counting. The minimum cost of taking T$2m is $110k cash and T$20k trade. Anything that isn’t able to be spent as a business expense also drains extra cash for GST and more cash for tax. The maximum cash cost of Bartercard is potentially as much in cash as you take in Trade dollars, creating a massive drain on cashflow. This doesn’t even take into account intangible costs.

  3. botkel says:

    I agree with a lot of the points asampwhaler has made. I don’t think you’ll find any person who knows my organisation that would claim it is so hopelessly managed so as to not understand the full implications of trading in Bartercard. Yet for 8 years we have been members of Bartercard & will happily continue into the future. Yes it took us a little while to learn how to use it effectively but as we have overcome this hurdle we have never looked back.

    “I’m amazed that so many businesses still seem to use it.”

    I think it would be a safe assumption that on the balance of probability there are likely to be a good number of savvy business people in the 7,000 members Bartercard have. This being the case I’d suggest that your analysis of Bartercard doesn’t quite pass the sniff test of objectivity. Either you are far more intelligent than the 7,000 members who believe there is merit to the system, or your view is possibly a little biased by your historical inability to make the system work for your business.

    Your analysis under “The Bartercard cashflow drain” I think highlights this point. Yes, it’s pretty easy to draw up a worst case scenario for the cost side of Bartercard, then ignore any potential benefits (or write them off as trash) and then claim to have proved it is a waste of time. On the flip side if you DO manage to spend your trade dollars on tax deducatable expenses, suddenly the vast majority of your ‘exposed’ costs are no longer applicable & provided you aren’t throwing away your trade dollars on worthless services / products you don’t have to gain a lot of additional benefit to be starting to save cash costs.

    I can appreciate that apparently you didn’t manage to find decent suppliers for areas you were currently spending cash – but I’d suggest that’s more a reflection of your ability to do so than decent suppliers simply not existing.

    “The obvious reason that you could move this stock for Barter Trade dollars and not for cash is that not enough people wanted to pay cash for it”

    That’s a pretty simplistic view of the business world and one I would suggest again exists primarily to support the points you have set out to make.

    Our business operates on high fixed costs which are required to provide a certain level of productive capacity. Beyond that we have low variable costs. Like any business the requirements on our production department ebb an flow a little – some months higher and other months a little lower. We attempt to balance it as much as possible but regardless of any attempts there will always be times in such a scenario where there is spare capacity.

    We don’t get a refund on this capacity if it goes unused. The vast majority of the costs are already paid for & topping it up to full will have minimal impact on our cost structure. This is where Bartercard is great.

    We find it pretty easy to come across Bartercard deals. Yes of course Bartercard trade $ are inherintely going to be viewed by a business owner as less valuable than cash. You can’t pay taxes on Bartercard. You can’t often pay wages, or rent or other costs in trade. But this can be easily used to your advantage and doesn’t suddenly mean they are worthless (or remotely close the claim of one third the value – I can’t speak for Australia but in my experience in NZ, Bartercard are quite staunch in ensuring businesses don’t hike prices for trade).

    If people want to ‘dump their trade dollars’ on us I’ll happily take them. I don’t find any problem in spending them on useful tax deductable expenses. In fact I’m currently in the red with Bartercard & could do with quite a few more.

    • Dave Smyth says:

      Hi Botkel,

      Thanks for your comments. As always, I appreciate the reply.

      Of course, my post wasn’t directed at your business and I don’t think anyone business that uses Bartercard is necessarily “hopelessly managed”. However, Bartercard are offering financial advice to businesses in their recommendations for using Bartercard. To me this means that they should also clearly explain potential pitfalls as well as any benefits. Try going to bartercard.co.nz and doing a search for “fees” (no results) or “tax” (very little information). Bartercard say “…the advantages and disadvantages are similar to ordinary cash revenue or expenses”. This is rubbish. Of course, it hinges on the definition of “similar”. I guess “similar” could allow quite a broad comparison.

      Regarding the number of people in Bartercard, I don’t think this means anything. What would be more telling would be a survey of how satisfied the actual members are. Perhaps I can get hold of a Bartercard membership list and send one out?

      I did acknowledge that there are ways that Bartercard can work but I still think on the whole, it’s not something that is for “every day use”. I was talking to a new client about Bartercard a couple of days ago and it turns out that he had been a member too. He said that instead of getting lots of new customers, many of his existing customers started paying him in trade dollars. Same money, more hassle, more fees! What I will say is that there is no such thing as “saving on cash costs”. Not when it means taking a currency worth less than cash and then paying fees to use it… that is not “saving”.

      Finding ways to spend Barter trade dollars is a recurring complaint and I don’t think it can be put on the business owner. There’s a directory. You look through it. You ring up a supplier and try and use your trade dollars. They then complain that they can’t get rid of their’s and aren’t taking any more and you try someone else. There shouldn’t be a need to “find a way”. You either can or you can’t!

      “The obvious reason that you could move this stock for Barter Trade dollars and not for cash is that not enough people wanted to pay cash for it”
      – Yes this is simple. If you have an alternative explanation, please provide one.

      You said: “If people want to ‘dump their trade dollars’ on us I’ll happily take them”. Excellent! Please provide your business details and I will post them here so Bartercard members can contact you.

      You also said that trade dollars are worth more than I suggest. Ok, so what would that worth be? How about a rough calculation… If there are 13% fees at best (not including membership or advertising fees), then I might claim that they are worth (at best) 87% of face value? At worst? Here’s a scenario…

      Business owner makes a non-deductible purchase and is in the 39% tax bracket. Let’s say the purchase is T$5000+gst or T$5750.

      Bartercard Cash fees – $550
      Bartercard Trade fees – T$100
      GST – $750
      Income Tax – $3676

      Total Cashflow Drain – $4976 +T$100

      You might dispute the income tax figure as it seems so high? This is because the tax has to be added on top of the trade dollars instead of taken off because the Trade dollars can’t be used to pay the IRD. Therefore the cash used for income tax is 39% of the total purchase PLUS income tax, leaving the Trade dollars as after-tax income, not 39% of the actual purchase. Ouch! If you look at it this way, the worst case (let’s ignore the trade fees) is paying $4976 cash to make a T$5750 purchase. If you valued the Trade dollars in the same way as I did above, this makes them worth much less. I’ve never seen Bartercard do any calculations in this way! They are always talking about “buying wholesale” or some other meaningless catch-phrase.

  4. webdesignersareripoffs says:

    So what your telling your customers is that you are a web designer and host website’s etc and you did 30k in sales in that one year for Bartercard trade dollars and from 7500 business’s in New Zealand, that are Bartercard members, that trade quarter of a billion dollars per annum you couldn’t spend that 30k on business related expenses.

    Somehow I find that very hard to believe. Your lying somewhere. And I’d presume it’s one of your first fact’s that you did 30k in extra sales and generated that revenue.

    Especially since when I look in the online directory there are dozen’s of web-designers to choose from including quite a few major web design firms such as Zeald and by the looks of there blog write about the positive’s in business instead of aiming at negative’s.

    The other thing is that web designers have one of the highest margin products/services available where you design a website for 3-10 thousand and anyone with any simple skills could spend 5 to 15 hours designing a website on wix.com and have hosted for roughly $150 per year.

    So the cost to you in taking on that extra job is very minimal and is your labor in the design time. That 5 to 15 hours, or the 100 hours you tell your client you spent on it.

    That is probably why there are dozen’s of web-designer’s as member’s on Bartercard. And if I was one of them, I would tell you Bartercard is terrible as a recommendation because who in there right mind would recommend extra business to there competition that they could get.

    You might as well just tell the customer to call you.

    Yes, the fee’s you mention are correct and I pay them, but I also get use of a trade-broker just like any other member to assist my business in the sales and my purchasing.

    I don’t know if you have ever paid a commission only sales rep but they would at-least charge 13% and I don’t see where the fee’s are advertised on your website for your products and services either? Isn’t that the pot calling the kettle black?

    You probably have missed the boat on this one, and it just never clicked for you. Although you did click slightly enough to get into building website’s as you know it is a very good earner.

    But in term’s of Bartercard, and this trading system. Surly when you did you so called 30k worth of extra sales that you claimed that you did.

    If you thought about it in a positive way you would of offered your existing client base a range of different products such as promotional stuff, pens, business card, vehicle wraps, printing, brochures, signage etc and turned your bartercard dollars back into real money and even make a small margin on it which would pay for your fee’s.

    There is even businesses which make professional video’s to go in website’s and ad design agencies.

    You could buy those service’s in Bartercard and charge your non Bartercard customer’s on your invoice in the real money and that is what Bartercard is all about. Bringing extra business and generating extra income. Suppose your still stuck in the box.

    It is not rocket science but hey, it is not necessary to change, survival is not mandatory.

    • Dave Smyth says:

      Wow, another disgruntled Bartercard member, or employee? That’s three anonymous comments from people saying how great Bartercard is. It’s just not so great that you want people to know who you are, right?

      I’m going to ignore the accusation of lying, because firstly, you don’t have the courage to say who you are. And secondly, because you’re only semi-literate and you might have meant “laying”, as in “on a beach in Fiji”. I’m not, but it’s a nice thought.

      Yes, we did take over $30k in Bartercard and it is more difficult to spend Bartercard dollars on business expenses if you’re a service-based business. I’m glad that there are lots of other web designers to choose from to spend Barter dollars on, that will prevent people from trying to dump them on me!

      Why do people who disagree with something these days also whine about someone being “negative”? Next you’ll be calling me a “Dream Stealer”!

      Web design, like all service industries, have a high margin. Our costs for producing the end product are minimal and the main “expense” is our time. Having said that, my lawyer charges more than three times what I do, my accountant charges double and I believe the guy who comes to fix the photocopier is charged out at more as well. It’s a pretty competitive industry, so hourly rates are not as high as you might think. Yes, there are many, many free/cheaper ways to build a website as there are many cheaper ways to do anything. You can write your own will, do your own accounts or even build your own house. You’re not really making much of a point with that are you? A basic website normally takes me about 15 hours. More complex sites, maybe 35-40 hours. The only website I’ve ever spend 100 hours on was one I built for myself.

      Maybe you didn’t read the whole article but I was showing that the Bartercard fees aren’t the main problem. Go back and read the whole thing again slowly taking note of taxation issues and problems caused by the inherent “value perception” of trade dollars.

      Yes, there are trade brokers who are meant to help. I think we went through three in a year. They seem to wear out and get replaced with a fresh one pretty quickly. It’s one of the recurring complaints from people who have used/use Bartercard.

      I am thinking in a positive way by choosing NOT to use Bartercard. Being able to make a small margin on other people’s services is rarely worth the time and hassle to offer them. I’d rather assist a complimentary business to earn more CASH, not some devalued notional currency that will stuff up their cashflow. It’s not rocket science!

  5. webdesignersareripoffs says:

    I wasn’t born yesterday. You build websites and you are obviously very good at seo, as I googled bartercard wholesale and came up with your site. You could easily build 10 websites to slag someone just for fun. I don’t know you and I manage my risks.

    Your lawyer and accountant invested a lot more time and money than you in education and that is why they charge that much. Your guy that fix’s the photo copier is an employee for a company that has multiple salary staff and multiple fixed and variable overheads.

    Your not stealing anyone’s dreams. But you have angled your article that states

    “If you’re considering using Bartercard, don’t. Put those costs into marketing your business more effectively and get real cash income without all the added fees!”

    Which means you haven’t grasped the concept. I have traded four times what you have and have picked up new suppliers that have turned out to be better than the ones I dealt with in the cash economy. More reliable, better products and when you do sales you get paid on time. This will be due to the fact that the exchange is managed by the Bartercard staff. There are no cowboys like the cash economy.

    So lets have a look at the value perception of the trade dollars as you stated is the main problem with Bartercard.

    So lets put an example together for a company that services photocopier’s that wants a web designer such as Zeald to build a website and you can correct me if you think I am wrong. Both are members of Bartercard.

    Step1) Photocopier servicing company buys a website for 5k Bartercard dollars including GST from Zeald.
    Step 2) Zeald get’s paid the 5k Bartercard dollars for building website.
    Step 3) Photocopier servicing company now owes the Bartercard trade exchange 5k in Bartercard dollars.
    Step 4) Photocopier servicing company does 5k worth of work for other Bartercard members the next month.
    Step 5) Zealad buy’s 5k worth of ad production videos from another Bartercard member in Bartercard dollars and sold to existing client for $6000 real dollars.

    Cycle continues etc etc

    What is the actual cost for Zeald and photocopier servicing company.
    -Zeald paid employee $25 an hour for 15 hours work building the website for the client.
    – $1000 cost in total.
    – Zeald generated $5000 Bartercard dollars and turned it into $6000 cash.
    – Zeald’s profit in the two transactions= $5000 in cash. ($6000-$1000)
    – Less Bartercard’s fee’s (5000 + 6000 x 13%)= $1430
    – $5000 – $1430 = $3570 profit.

    Photocopier servicing company:
    – They also paid an employee $25 an hour for 25 hours and charged out at there usual rate of $200 an hour. Total employee cost for the company is $625 to generate a $5000 website.
    – 13% margin to Bartercard $1300 for transactions both ways of $5000.
    – Total cost to company for new website $1925. (1300 + 625)

    This is a pretty close to perfect example of transactions however there would be other small costs associated such as vehicle maintenance for the servicing car(available on bartercard), hosting costs for website etc.

    So looking at the value perception of that transaction, I am sure the member that paid for the website in there own services is happy. By being a Bartercard member they bought a $5000 website for an actual cost of $1925. If they are not a member they would have to find that $5000 worth of business to pay for it. That is probably why a third of small businesses in NZ don’t have websites.

    The value perception for Zeald being a Bartercard member, picking up a new client, that has paid on time, and generated a $3570 profit from building a $5000 website for a Bartercard client.

    So as you said:

    “If you’re considering using Bartercard, don’t. Put those costs into marketing your business more effectively and get real cash income without all the added fees!”

    I think it should be re-written more along the lines of, “if your considering spending $5000 on a new website, don’t. Put those costs into marketing your business more effectively and save your real cash income and pay for other services with your own goods or services.”

    The only value perception problem is from business owners like yourself that do not grasp the concept. That is why to you it has no value. 7000 plus business owners have grasped the concept in NZ. To US it has value.

    • Dave Smyth says:

      webdesignersareripoffs – I’m surprised to see you back… whoever you are! Why not identify your business on here so everyone can spend their trade dollars with you?

      I didn’t realise that this page ranked highly for a “bartercard wholesale” search! That must really wind up some people at Bartercard HQ! The “wholesale” claim is absurd anyway.

      Academic Education does have an impact on charge out rates but it’s not the be-all and end-all, particularly in business. Try asking Richard Branson how much his hourly rate is. He’s a high school dropout.

      No, I’m not dream-stealing. My opinion on Bartercard is just that, an opinion. You can take it or leave it, or comment on here. There’s a pile of official Bartercard websites out there designed to dominate searches about it, so it’s hard for anyone to find many negative opinions on it. I suggest anyone reading this checks the facts for themselves, pulls out a calculator and make their own mind up. It’s not like I drew a cartoon of Mohammed or took naked photos of Kate Middleton, I don’t know why you’re all so upset!

      Your “perfect example” with the photocopier company and the web designer is interesting. I’ve already said the process can work IF you can spend the trade dollars as a business expense. However, companies can swap services without Bartercard and avoid Bartercard fees altogether. Also, you’re not refuting my figures on a non-business expense, you’re just ignoring them.

      Good for you if you like using Bartercard. Go for it. I have no objections. It’s not that I don’t grasp the concept, it’s that I see the pitfalls you refuse to acknowledge.

      I already offered to conduct an independent survey for Bartercard on their member’s success. Just give me the means.

  6. theposter says:

    Gents, I wish I had read a post like this before joining Bartercard.

    here is what i learnt.
    1- The greater majority of members are dissatisfied.
    2- you need to change suppliers regularly as members stop taking trade as they haven’t spent it fast enough
    3- companies often have two prices, a discounted cash price and then a Barter price. unless you are using a hair dresser or restaurant you will notice the prices increase. some times as high as 3/4 times the market rate.
    4- members cant leave as they need to spend before they do, this gives the company the impression of having lots of members, they have many clients that are either in too much debt as they wont trade fairly or their product has no value. or too much credit and are waiting on a worth while purchase before they close their accounts.

    There are much smarter ways to invest both your time and money. unless you fancy yourself as a car boot sales man that wants to spend 10 hours a week looking for something of value.

    I recently purchased two holidays and a toy for my son just to get out of the exchange. and obviously the hotel didn’t include drinks and charged us the full peak season rate!! then weeks later i found out the buggy I purchased was faulty and that’s why it was being sold on barter (for double the retail price)

    I don’t normally write on these things but really felt the need this time.

    good luck to all that are still stuck and trying to leave without losing too much money.

    • Dave Smyth says:

      Thanks for your post. This sounds like the same experience I had and similar to what I’ve heard from others. Aside from the other posters above, I haven’t met anyone who says that Bartercard has worked really well for them. Like you, I ended up blowing my trade dollars on things I didn’t need just to get rid of it.

  7. lulubellisma says:

    I have read all of the above blog’s, and want to acknowledge you for taking the time to detail your experience about Bartercard. We have just received an account to leave Bartercard NZ, for which we are disputing. We are new member’s and have not received one single transaction of trade. Our account manager by his own admission struggled with the concept of what our business is. Manufacturing! We plan to dispute the account right down to the personal guarantee they now claim will fall on us. I cannot believe we joined this club. Anyway thank you for your blog.

    • Dave Smyth says:

      Sorry to hear about your bad experiences. Well done for making it through the lengthy blog and comments though! You’re certainly not alone. From the ex-members I’ve spoken to, I believe that there are a huge number of business owners who walk away from Bartercard still carrying trade dollars they can’t spend or like yourselves, having never even made the trade dollars to start with. Even more would have taken barter dollars for some time and lost money due to Bartercard fees and tax costs.

    • Andrea says:

      I myself was lured into setting up an account when opening up a new Ladies Only Fitness studio. We spend approx. $10k, but only had a couple of inquiries over 4+ years. The Bartercard office in Melbourne was terrible. Staff turnover was so high so no one knew my business, or worked for us to promote us. The Manager wouldn’t even call me back. I emailed off adds for Newsletters to not even see them listed?? After lack of trading, and me hassling them to promote me, etc, one of the service guys acknowledged it wasn’t working and that i had been let down. I started getting lugged a non-trading fee (something that had apparently just been brought it) He said they also did not agree with the new fees so froze them for a while He then suggested I cancel the account due to the non-trading fees (u pto $400 a month). This then meant unbeknownst to me that i would then have to pay the trade dollars back???
      The last time I spoke to QLD (after receiving letters of demand) I expressed my issues and dis-satisfaction, and said i was happy to still keep trading and sell memberships to my fitness centre. I then heard nothing…. UNTIL ALMOST 4 YEARS LATER, i have now just received court documents????
      Would love to know if anyone can suggest any legal advice.
      Many thanks

      • Dave Smyth says:

        Wow Andrea! That is some story. I would say that their lack of communication will work in your favour in court. Courts do not appreciate any business using them in place of negotiation. All I can suggest is to be very well prepared with orderly evidence and allow them to talk themselves into a hole – they nearly always do! Don’t try to dispute everything while they are talking or you will lose the support of the mediator.

      • Lazarus Long says:

        Wow it does seem strange that a gym had trouble getting trade. Gym membership is hard to get hold of as gyms get too much trade and have to stop.

        DNET (Did Not Enough Trade) was brought in to get rid of customers that spent the “credit” and didn’t trade otherwise. I tried myself but there are a lot of people in my industry on BC. The TC’s will pretend to be a mate and cut them bit they stopped last year.

        I refused to pay and they suspended my account. I said I would go bankrupt before I paid a single cent in cash to them. They gave me a sales account and I paid them off.

        Try to negotiate that first.Then find a sucker (there are a lot in BC) that has a lot of trade and little cash (you can’t have both!) Offer them $2k for T8k or try for T10k in this economy. Pity the fool who accepts as most of that $cash you offer will be gone in $fees and $GST.

        I’d love to see a class action against BC surely fees like DNET can’t be legal. The big “4” banks got done. one little threat of class action may get rid of this parasite on business.

        I know it sounds like I am bitter and angry. I found this site while I was researching setting up a domain and advertising campaign called bartercardsucks.com :) There is no point in being angry at a wild bear or a bird that shits on your windscreen because that is in their nature. But I can spend a lifetime making people aware of being duped.

        • Andrea says:

          Thank you for your reply Lazarus.
          When you say… “… Offer them $2k for T8k or try for T10k in this economy…”
          … by that do you mean I pay a BC member a few grand to ‘sell’ them my trade debt. Is this something done “privately” between members!!!???

          Also when they gave you a sales account to pay off, was that just a payment plan to pay it back.??
          Sorry I’m so out of the Bartercard loop

          • Lazarus Long says:

            “Thank you for your reply Lazarus.
            When you say… “… Offer them $2k for T8k or try for T10k in this economy…”
            … by that do you mean I pay a BC member a few grand to ‘sell’ them my trade debt. Is this something done “privately” between members!!!???”

            Yep it can be and I am no expert on this. Trade conversion or is it cash conversion I can’t remember – thankfully! An example is buying an iPad for $800 and selling it on the auction site for T3k. Some computer parts go or stupid amounts of trade. The auction site has pretty strict rules nowadays so to me it is dangerous. I am also not sure how real it is. Some of the electronics getting sold for ridiculous trades may be internal TCO stuff.

            Since everyone in BC is a business it is not hard for the person with tonnes of trade to give you an invoice for “services rendered” and you pay them real money. You give them a similar invoice for “services rendered” and they pay in trade. All mostly legit. ATO wont care as they are getting GST and as far as you are concerned the service is buying trade. I am not sure on the legality as I am not a lawyer. I know a lot of people who have done exactly that with TCO help and cooperation.

            Even in good times 1:3 ratio was expected. So $2k got you T6k. Nowadays it would probably be more but it can’t be much more as it is a law of diminishing returns. The higher the ratio the more $cash fees that will need to be paid and the less cash you will have left. Same for you. Even if you pay $2k for T8K don’t forget you have to pay trade fees on T8k +$GST.

            “Also when they gave you a sales account to pay off, was that just a payment plan to pay it back.??
            Sorry I’m so out of the Bartercard loop”

            Yep. Just a sales account where trade went in and nothing came out until my debt was gone.

          • Andrea says:

            Thanks heaps Lazarus for your info. Its really helped :)

  8. russell says:

    Dave, please send any disgruntled members my way. If they are struggling to turn trade dollars into cash sales they are doing it wrong.
    I have been involved with Bartercard over a number of years and it never ceases to amaze me how people struggle to turn extra sales into a headache.
    My current business is running at around 70% Cash 30% trade and I am taking full trade at normal selling prices on any product or package.
    It is different to the cash economy.
    In the cash economy it is hard to get sales and far too easy to spend. You need to change your way of thinking when joining Bartercard. Sales become easier and spending is something that needs to be worked at.
    My business turned over 18k in trade Across November and December (most recent gst period). I spent 17.3k of it before the end of Dec. Just 300 dollars was non deductible spending. The rest was spent on a whole shopping trolley of business expenses from web design, hosting and internet access to telephony, printing accommodation, hospitality and vehicle hire (we moved premises and the wonderful guys at James Blond rentals hooked us up with a big boy truck.
    Now then. I work bloody hard at my business and I own my numbers. Analysis of spending has shown me that 15k of the trade dollars spent was money I would spent cash on. 300 was personal and the remaining spent portion of 2000 trade dollars was deferred upgrades or “nice to have” items to make work easier.
    My total tax liability from that 18K is on the personal of 300 and the balance of 700. Leaving tax to pay on 1000 trade but 15k CASH saved on the increased turnover.
    All of this has been funded from my cost of trade which actually leaves me around (in real cash terms)8k better off over two months with a tax bill of around 300 dollars.
    Show me a better way to make extra money and I will eat my little green card.
    Anybody wanting to talk to me about how to get top value advertising packages on full trade across a range of media and only pay for guaranteed results should email
    russell@truth.co.nz. Print radio, online and billboard. If I cannot demonstrate in 15 minutes how to make more cash profits in your business using Bartercard I will pay for the coffee.
    I do not work for Bartercard.

  9. Tesrof says:

    We’ve been using BarterCard for just over a year now – no problems spending the BC$, most for direct work expenses and some for home renovations.

    I tend to look at BarterCard as one of the ways to increase our sales. If we were to employ a sales rep they would want a commission of 10% plus some other expenses. This compares very favourably with the total cost of the BarterCard fees – 13% (6.5% to receive and 6.5% to spend). And comes without the problems some sales reps can bring. BarterCard customers pay in full very quickly, cash customers take a bit longer. And very few sales reps come with an established network as extensive as the BarterCard network.

    Before we joined we heard the warnings from people who got caught with too many BC$. In general we did not think they ran their own businesses as well as they could have – ie, had they been a cash only business they would have still struggled … BarterCard gave them another excuse.

    Some have said above that BC prices are inflated; I’ve certainly seen products being sold for a lot more than I would be prepared to pay, but is this a BarterCard thing or is it pretty typical of our economy in general?

    Naturally it is important to control the amount of BarterCard sales we do and I don’t think we want it to be much more than 10% of our total turnover. It is also important to know how a customer is going to pay for an order before accepting their business.

    What happens if we get too many BC$ and can’t spend them? What would we do if we got stuck with BC$ 20,000+? Probably very simple; a) stop taking BC sales for a period of time, and b) look at a holiday in Rarotonga or maybe even BarterCard Property.

    One wise BarterCard man recently told me, “use the BC$ to market and promote your business, aim at turning 1 BC$ into 2 cash dollars.”

    BarterCard is harder than cash to manage but that doesn’t mean it wont/can’t make a valuable addition to a business.


  10. Lazarus says:

    I used “Bartercard is bad” as a search in Google. You got top results.

    One of the things you didn’t mention is DNET (Did Not Enough Trade).

    Bartercard likes to give you credit but if your sales fall below 6% of your credit over a three month period they charge you additional cash fees.

    Lets understand this. Bartercard is not exclusive, they don’t care who joins as long as you pay (cash) to join. You area may be flooded with similar businesses to your own but it is a limited market. Bartercard is easy to spend on lifestyle but difficult to spend on your business.

    Don’t get me wrong my wife and I spent too much while bartercard was doing well but now the directory is about a quarter of the size it was a few years ago. I never turned down Bartercard work but it simply was not there all the time. I tried really hard to do as much as I could and failed. All I get is threats not help.

    I am in the shit now with Bartercard coming after me very aggressively, they cancelled my card and said I couldn’t spend even though I had lessened my debt over the last year and absolutely refuse to spend any of it on lifestyle. Only tax deductible expenses.

    They will insist I pay it all back in cash even though we all know it is barely worth a quarter of what they say. Just today I offered someone $1000 cash for T4000 trade an they jumped at the chance.

    Don’t join Bartercard and get out ASAP. If you have debt; pay it off as soon as possible and leave. I also have no doubt they have a charge for leaving.

    I will probably be devoting a bit of my time in the next few years talking people out of bartercard and I will probably set up some sort of help site with others burnt by this company.

    • Dave Smyth says:

      Wow, really sorry to hear of your bad experiences with Bartercard. I haven’t used Bartercard myself in quite a few years and hadn’t heard of the DNET fees. I know there are a lot more stories out there like yours, so it would be good to hear from others like yourself who are disillusioned by their Bartercard experience. The people commenting on how great Bartercard is are ignoring the fact that while they may have been able to find a way to spend their Bartercard dollars on business expenses, there are many more people who end up getting stuck with them. It’s similar to multi-level marketing. A few benefit, while most get caught out by a system that inevitably fails. If you do start up a website, let me know and I’ll provide a link to it within this blog.

  11. Lazarus says:

    I think the people commenting on how great it is may be TCO’s or their trainers. I used to work for a franchise and while fixing their computers used to hear their spiel for new TCO’s. The examples given above are nearly exactly what I heard during those meetings. I found it hard not snort in derision.

    The other people are probably gold or platinum card holders. If you sell, you get rewarded. I have met so many people proud of their status as a non-green card holder. All I think is how much cash have you spent (lost) on a parasitic company whose sole concern is making you believe you are doing great. The classic gaming reward of achievement for your labour, the rush of feigned success. Its called cognitive dissonance.

    Recent example. A client I worked for was proud he bought a bed on Bartercard for 3k.

    3k bed
    To earn 3k he paid $165 in cash to earn
    Then another %165 to buy = $330 just in trade fees
    Then he paid $300 in GST on the 3k to earn – $630 cash so far.
    Since the 3k bed is not for business he will have to pay tax from between 22% and 38% so lets say 25% or $750 cash = $1380

    I said you could’ve probably paid them $1380 cash for the bed and by passed bartercard altogether. Worse you had to work for $4380 to pay for something that you could’ve probably got for less than half what you paid.

    Bartercard is a waste of time and a waste of money.

  12. Lazarus says:

    I’ll tell you some more things people don’t generally know.

    There is such a thing as a media account where you don’t pay cash fees you pay trade fees although it may be 10% but no cash at all.

    Also I know of companies that only pay 1% in cash fees if they can negotiate a business that is unique and needed IE nt labour but actual tangible goods. I know of ex TCO’s that have negotiated this because they KNOW the right people.

    It is a SCAM! and should be avoided.

  13. Gareth says:

    Great comments Lazarus – very interesting.

    I was sucked in to joining the “Bartercard family” a couple of years ago, it was the worst decision I could have made.

    I’m not going to go in to detail about my situation but I think people deserve to know about the Bartercard scam.

    Has anyone approached Fair Go? They’d be all over this wouldn’t they? Or maybe not.. Fair Go are owned by TVNZ and I think TVNZ use Bartercard – they’d most likely be on a Trade Only deal as you mentioned in one of your comments Lazarus.

    I took Bartercard to court and have a second hearing due. I think I’ve got a good chance of winning my case. The Broker that signed me up was a bit shonky – he filled in one of the documents on my behalf and signed it for me as well not to mention a few other sneaky tricks.

    I really appreciate the encouragement they give to their new members to start spending Trade dollars as well, so much support – it helped me dig a nice hole.


    • Dave Smyth says:

      Hi Gareth – Sorry to hear about your bad experiences of Bartercard. You won’t see anything about Bartercard on Fair Go because that TV program is a “consumer affairs show” and only deals with consumer complaints against businesses. They don’t get involved in business to business disagreements. There might be room for a whole new show about those sorts of issues! Let us know how your court case goes. I’d be happy to post the results if you send them to me.

  14. mazif34 says:

    This is an interesting blog to read – I joined Bartercard late last year as another party owed us a significant amount of money so out of desperation I took Bartercard, which is quite common I hear. I then sold a couple of items and have left the “money” sitting there as I am unsure how to spend it or what to do. I always had concerns about the fees and the golden promises, to be honest I think it is a dumping ground for over inflated purchases and the only way to use the $ seems to be to manipulate the system. Now I am stuck with T20k I’m unsure what to do with and a monthly fee. I don’t believe our business bank account should take the brunt for buying and selling and swapping etc, so I will leave the funds frozen for now.

    • Dave Smyth says:

      Thanks for your comment mazif34. As some of the Bartercard members have mentioned above, if you can’t find a way to use the trade dollars as a regular business expense, you’ll need to find a way to shift them by buying something in and selling that for cash. It’s inconvenient but it will be better than paying thousands of dollars out in cash to pay the GST and income tax on your Bartercard trade dollar “profit”. Even if you bring in a little less cash than you spend in trade dollars, you could still be better off. If you don’t manage to get rid of them by 31st of March 2014, you’ll be paying several thousand dollars in real cash to pay the tax on them.

    • jayden07 says:

      Hi mazif34,

      Sorry to hear your experience about bartercard. If you are sitting T20k and not doing anything with it, would you be interested to sell it for cash like Lazarus did? Thanks!


  15. Ella Howard says:

    Hi, I am reading this blog with great interest because I used to work at Bartercard (I left about 7 years ago). I was a Trade Broker. I had a list of 128 clients – 2 of who were satisfied Bartercard members. I had clients who Bartercard were threatening to sue because of their inability to pay their fees. I had clients who were sent to the wall because of their fees. I LOVED the concept of trading (it is a great concept), but it is an entirely different animal to make work in a practical sense. The only place Bartercard belongs, in my experience, is in a company where money is no object – and therefore trading is done as somewhat of a sport. Bartercard does not belong in a small or medium sized company because of their fees. From experience, some of my clients had their businesses killed off by the outrageous cash fees. They literally had no idea how in over their heads they were… until Bartercard debt collectors came calling. It was the the ‘funnest place ever’ to work (and that was how it was promoted) – but there was no mercy when it came to their steep fees. Buyer beware – do your homework… and as an ex-employee, I can state unequivocally that Bartercard is not a smart business move.

    • Dave Smyth says:

      Thanks for that insight into the internal workings of Bartercard Ella!

      • Ella Howard says:

        I would just like to add a follow up note to my previous comment, because of other bloggers comments regarding ease of spending trade dollars vs. the struggles that others seem to have. Bartercard accounts are split into ‘key accounts’, ‘regular accounts’ and ‘spend down accounts’. The key accounts are those ‘big’ companies that have the potential to be used very widely by Bartercard clients. These clients are offered the best of deals. The cream of all trades. The opportunities to spend on much sought after services, e.g. stationery supplies, telephone expenses, electricity bills, insurances, etc. ‘Regular accounts’ are not offered (or very rarely offered) these kinds of trades. They simply don’t know these kinds of accounts exist. But they do. But these companies are brought on board to service the ‘more important’ companies that Bartercard wants – and they are specifically signed up for big clients, or so Bartercard themselves don’t have to spend cash… that’s right – Bartercard signs clients up for purposes of paying their own bills on trade – and these deals are never passed down to accounts. Then there are the ‘spend downs’ – these poor souls basically never offered anything. Their cash fees are to be paid up front – or their accounts are frozen. There are countless accounts like these. Bartercard highly favours their big clients, and limits their best deals to them. Conflicting stories of how well Bartercard have treated their clients are based on this. Small use to Bartercard? Small affection from Bartercard. Great use to Bartercard? Great affection from Bartercard. ALL ACCOUNTS ARE NOT TREATED EQUALLY. I am not meaning to ‘have a go’ at Bartercard, just for the sake of it – but you better understand that if you join, you better have mighty deep pockets.

        • mazif34 says:

          Hi Ella, your comments are most helpful to a current member…
          The question is, how does one “quit” Bartercard without door knockers and massive amounts of debt? We currently have T21K to spend which is our own money, with nothing owed to them, but how does one back away gracefully?
          Bartercard, although a good idea in theory, is a dumping ground for items people can’t sell in everyday life. I have yet to find a way to Barter properly and am sick of reading emails from the broker saying that only certain items by said company are on BC, and ‘I’ll have to check as to what they are prepared to do on BC”. It’s like going to Paper + and being told to go to the bargain table in the corner and this is all you have to choose from, which I think is unfair.

          • Ella Howard says:

            Hi, I hear you. And I understand the ‘second rate citizen’ feeling of approaching a company and wanting to use Bartercard. The following are options that may fit your situation:

            1. Bartercard used to sell a few cars on trade. Do they still do that? If so, get a Bartercard mechanic to check it out and buy it – if it is sound enough – and then sell it on Trademe. You could try this approach for as many times as it takes to use your trade… although realistically, it won’t work out dollar for dollar, but at least you can turn your trade into cash. This approach you will need to proactively make work yourself. Call a trade broker (it doesn’t have to be your own) and ask if there are any cars available on trade. If so, ask for details and to visit to check it out. Make this move quickly, and close the deal as quick as you can.

            That is the most ‘profitable’ cash turnaround for your situation. It would convert your trade to cash pretty quickly.

            2. The party line is that they have none of the order business expenses available… but that is not true. You can pay insurances with Bartercard, parts of your phone bills, as well as many other standard expenses – I just suspect that with times tightening that Bartercard is keeping these kinds of spends for themselves. You can ask again about these – but it seems you will likely be told ‘no’ again.

            3. The third way of this is to set up parent-child accounts. These accounts are set up to pay people with (e.g. staff, debtors, etc.) and remove the trade dollars out of the parent account. Therefore, you do not have the fees associated with that account. When the money is transferred into the child accounts you can close down the parent account with all the trade intact – which gives you breathing time to decide how you want to spend. When I was there, a child account cost around $5 a month… no doubt it is more than that now. However, this would be a fairly good situation to be in for you now. You would forfeit none of your accumulated trade – yet you would not have fees associated with keeping and spending that trade. Does that make sense?

            You will always get your trade broker, the branch manager – or sometimes even a visit from the head office about staying on as you intend to leave. It’s pretty much unavoidable. I would quietly go about getting all my ducks in a row if I were you, before that happens though. With your trade in child accounts, however, that’s a fairly mild way to back away :). You won’t incite a visit from that I don’t believe. Fade into the background, show yourself to be stagnant with no interest in growth as you have enough outside of them… sometimes that is enough to make them back off.

            I hope this info has helped you :)

          • Ella Howard says:

            oh, and one more thing… you mention ‘golden promises’ from Bartercard upon joining – I was trained under David Robbins, which was when Bartercard was still in its golden days. His classic sales line was that it is all ‘smoke and mirrors’ and to sell your grandma to get the sale. So don’t feel like you’ve been duped more than anyone else. When I was there, there were around 1,200 new members who joined due to the smoke and mirrors. The trade brokers are trained in the lies… it just takes them a while to figure out they are lying.

  16. NZMentor says:

    Greetings: I am in need of approx NZD 20000 (NZD Twenty Thousand) Bartercard Dollars. I am willing to pay between NZD 4000 to 5000 cash for these. Bartercard Fees can be 50-50.

  17. champy says:

    Greetings: We are in need of approx NZD 150,000-200,000 bartercard credits. Willing to pay
    20-25 cents on the dollar cash for these. Will pay my own fees.

  18. kerrinholston says:

    Agree with most of the comments however Bartercard is now charging me 6% for sale and 6% for purchase. I have never ever been sent a courtesy email for the increases. When I queried this my account manager said that I had been sent these. I asked her to resend but 1 month later have not received anything. This also is a far cry from the 5% for sale and 3% for purchase when I signed.

  19. Dave says:

    Hi Dave,
    Thanks for the excellent post and replies. I read them all after being approached by a Bastard Card (oops) sales consultant and deciding to do a little homework before blindly accepting what he told me. Very interesting to note how some of those in favour of Bcard try to discredit you because you’re in business as a web-designer who makes a potentially decent margin on your business activity (totally irrelevant argument and discredits them instead!), and those who use the illogical argument that 7,000 NZ business owners can’t all be effectively ‘naive’ or poor managers. How many people once thought the earth was flat? Surely, there were astute people amongst them, so they couldn’t be wrong…could they? Doh! Of course they can!!! Doesn’t mean 7000 business owners are dumb…but may mean that they’re too trusting and too quickly believe what the Salesman told them. If we were to use that sort of argument, then we should ask “How many businesses in NZ (ans. over 505,000) and what fraction of them ARE using BC (Answer 1.4%) and then why are they so much smarter than the ones who aren’t?

    1.4%! No wonder it’s so difficult to find other local businesses for which to spend your Trade dollars!

    What those who are in favour also seem to gloss over, is that you were a BC user, and so you’re not just an arm-chair critic…you’ve been there done that.
    I’m certainly glad you started this blog, and found your arguments very astute and convincing. After reading them, and doing some additional research, and reading the fine print on the contract (application form), I spoke to the sales consultant again, over the phone. When I mentioned some of the charges in the fine print, he was totally adamant that those charges commenced only after 12 months…however, he couldn’t explain why that wasn’t written on the application form! I then asked why I couldn’t pay all of the Barter Card fees with BC Trade Dollars (and I do know why, I just wanted to hear his response), and instead of telling me that they need physical cash to pay GST etc, I was a little surprised that his answer was ‘Well, how could we spend all those Trade Dollars? When I answered ‘in the same way you expect your customers to’, he simply thanked me for my time and hung up.
    Keep up the good work.

  20. booxo says:

    So it seems that you haven’t actually made comparisons correctly…
    Yes this is “trading” (inhouse) whether this is Bartercard or any other trade types you really need to compare APPLES to APPLES.

    For starters regarding to the “fees” as being extreme.
    You are given trade dollars which is correct – out of trading what would be the nearest equivalent A BUSINESS LOAN.
    You go to the bank to get a loan….which also has fees and also an interest rate. this may not be as high but this is still the case.
    So once you have a loan from the bank you use this for the purpose of you business….YOU WILL ALWAYS HAVE TO PAY GST this you will never get out of. So with the Trade this must be paid in cash, as this needs to be paid to IRD (and cannot be paid in thin air)
    Tell me then when was the last time you walked into the bank…and made $30K?????
    You made an extra $30k from using Bartercard. You cannot just talk about fees and not look at the whole picture and compare it to what else is out there in the market because it is not a fair comparison.
    Also as a Business Owner you would appreciate that what you Charge for your services are used to pay for your expenses….
    Of course Bartercard have to pay their staff to FIND YOU BUSINESS. Also they put on trade shows for you to maximise your business.

    you cannot just have the “FEES” as your main point you have to look at the whole business and what it offers to yourself.

    you cannot discredit the $30k EXTRA you made in those trades that you wouldn’t have otherwise.
    but yes there are always business expenses that will come with any business, eg GST (always) and other fees.
    like with starting out with any business they say that majority fail within the first year. you will have to build up this avenue as well and be smart about it.

    and no I don’t work for bartercard…just been in sales a lot throughout my life to know when you need to compare APPLES WITH APPLES and not just pick and choose the bad points without looking at the whole picture. as for how bartercard works (staff wise and tiering the accounts) I cannot comment on.
    But you also need to make a good relationship with your trade broker I assume. I am an account manager, if I am treated with respect from my clients (as I always treat them with respect and try to find the best solution for them at the best price) I still have my favourites and its not necessarily the ones that make me the most money.

    Food for thought anyways

    • Dave Smyth says:

      Hi Booxo,

      Thanks for your comments…

      Here’s a few points to clarify some things…
      1. There are no restrictions on how many trade dollars Bartercard can loan (unlike banks) – the more they loan the less they are worth.
      2. No one ever wants to trade barter dollars for cash 1 for 1.
      3. No matter how much you are in credit, there is no interest.
      4. We didn’t really make $30k. After fees and tax, it was far less than if we had taken cash and then we couldn’t spend it. This is a very common complaint!
      5. We didn’t “walk into a bank”, we traded real work for something with a face value of $30k that was actually worth far, far less.
      6. If you think “fees” were what this blog is all about, you haven’t read it properly.

      I’ve been self employed for over 20 years and in web design for over 15 years. I’m much better off without Bartercard.

  21. BruceMcP says:

    Dave, like yourself I also provide web and database services and thought Bartercard sounded, in principle, like a good idea. At that time I was in start-up mode and needed to increase my portfolio of work and client base. After 4 years with Bartercard and “funny money”, here’s my findings:
    1. Their sales people aren’t worth squat.
    2. Bartercard seems to be a dumping ground for third-rate product that can’t be shifted otherwise
    3. I have accepted that I am locked in to Bartercard (my current balance is around T$12K)
    4. My business has grown to the extent that I am no longer taking on Bartercard work unless they are prepared to pay through the nose.

    When it comes to trade dollars I double my prices and include a hefty ongoing monthly hosting fee. This gives me about a 4:1 ratio of trade dollars to cash (even when taking into account GST and fees).

    And searching a bit, there are some gems amongst the Bartercard dross especially in the service sector, for which at the above ratio I am paying for at 25% of their rates. I’ve been able to take the family away on some spectacular holidays over the last few years; repaint my old motorcycles; go out for meals on a regular basis. Lifestyle things which ultimately we are all in business to support.
    Cheers –

    • Dave Smyth says:

      Hi Bruce,
      Thanks for your comments. That sounds very much like my experience of Bartercard.

      I can’t remember everything that I had to spend the trade dollars on just to get rid of them but I do recall buying a set of top end ski equipment for about B$3000. I’d never have spent that much normally but we had to spend it somehow.

      Boosting prices for Bartercard buyers is very common (although against Bartercard terms) and you’re probably on the receiving end of that in some cases too! It’s a tough call, because although it’s fun to do all that stuff (and you’re right, you do some of it anyway), the cost to real money cash flow is what puts me off. What I discovered was that when I stopped wasting my time working for Barter dollars, I had the time to get more customers paying real money!


      • Lazarus says:

        Its a pretty classic mistake and a good way to go broke.

        Looking at turnover is extremely simplistic and Bartercard sales really push this. You can have millions in turnover and still not make any money.

        1. OK you whack up your prices so much and people still buy your stuff because they also have trade they can’t spend. That also means that you are paying even more on GST and cash trade fees. Which also means you have to work harder in the real economy to have those ridiculously high trade dollars. At least the people buying from you are getting a tax deduction!

        2. You can’t spend too much of it on your actual business so you spend it on “Lifestyle”. Very dangerous! You pay income tax on that in cash (With cash trade fees incoming and outgoing) which means you have to work harder in the real economy, it pushes your taxable income up, which means you have to work harder in the real economy. You can’t claim a tax deduction which would actually decrease your need to work harder in the real economy.

        I’ve seen people pay ridiculous amounts for a physical item that could cost ten times less in the real economy. If they added up what they have to pay in cash in fees, GST and other taxes, they would’ve been better off not buying in trade at all.

        How much will bartercard actually cost my in Real Money ie cash?
        $GST(10%) + $Trade fees(whatever your super secret don’t tell anyone because you are special trade fee is%) + $(same again to spend it%) + (if you spend it on lifestyle and not on business)$ income tax or $company tax = it could be up to 50% of what you earned in trade you have to pay in cash. It is crazy!

        Do your business a favour and make a plan to get off bartercard. You may be better off just giving the trade dollars up. If you use them you have to pay trade fees. If you can spend it on the business – OK otherwise see if you can do a deal to give to charity and not pay trade fees. If you owe money, pay it off.

        You are working much harder than you should be. It feels good seeing that turnover figure but it isn’t real.

        I paid off my debt and I am so damn glad.

  22. Michael says:

    You guys sound like a bunch of babies! I don’t know too many businesses that you don’t have to spend money and time to get the word out or attract new customers. Bartercard is just another way to get new customers. AND when you get new BC customers they talk to their friends (who aren’t BC members) and you do some cash business.

    Maybe your businesses don’t fit the model. Get over yourself. Maybe you don’t know how to work BC properly or you just don’t want to…fine. (and I’m not talking about raising prices to BC members, that’s just unethical ). If you’re working out of your house building websites…God bless you. Maybe it doesn’t work for you to trade. So don’t do it!

    I spoke to my Chiropractor about his business last fall. He asked my advice on whether he should put an advertisement in the local paper for $1,600 cash. I asked what he thought his return would be…how many patient does he think he’ll get. He wasn’t sure. Spoke to him recently and he told me he didn’t get a single new customer from the ad. Fortunately, he didn’t whine and cry or say the local paper sucks! or I would have smacked him in the head and say, “Grow up Doc! You have to spend money to make it.”

    I don’t want to spend a lot of time on this, but you should probably move on. I often tell people to use the right tools for them. A fishing pool in my hands is useless, but in a real fisherman’s hand it’s magical. It sounds like you don’t know how to use this fishing pool called Bartercard and you want to blame the pool, the water and maybe even the fish. G’day!

    • Dave Smyth says:

      Thanks for your comments. However, I don’t think that you have understood the issues. No one has complained about lack of people wanting to spend Bartercard with them. In fact, since I put this blog online, I’ve had quite a few people contact me asking for help to get rid of their Barter dollars. Regarding over-charging… I agree that it is against Bartercard’s terms but I think it is actually quite an honest and rational thing to do. Barter dollars are not viewed as holding the same value as real money so you should expect to have to pay more to spend them. Would you trade US$ for Mexican Pesos 1 for 1?

  23. Neil says:

    Dave, I completely agree with your comments. I found your blog because I did a google on ‘does bartercard work’. I was wondering if it does work for some people, because I’m seeing a disturbing and annoying trend with a few of my clients who trade with Bartercard. Coincidentally most of them are web design companies because I provide services to web designers.

    I don’t myself trade with it, but I’ve noticed that my clients who do consistently have problems paying their bills on time, or even at all. They are by far the worst payers and they all plead lack of cash as being the problem, to the extent that it interferes with the normal running of their businesses.

    They have large amounts stored with BC but cannot use that to pay most of their operating expenses. The cash goes on wages, lease, tax, GST, etc. and suppliers get paid with whatever cash is left over. The other problem is that because many of their own clients expect to themselves pay with BC, if they stop accepting BC then they will those many of those clients.

    Maybe overcharging and split cash/BC are both against BC terms, but there is no doubt that is common practice and frankly the poor value of BC makes it essential.

    Sure, I’m prepared to believe Bartercard works for some businesses, but new adopters should tread carefully.

    • Dave Smyth says:

      Thanks for your comments Neil. New BC members certainly do get caught out thinking it’s great to get all this new “easy” business. That’s why Bartercard tend to protect them from too many enquiries early on.

      • My name is Leigh-Ann and I am an accountant with Accounts Online and a property investor. We were responsible for getting the Bartercard statements feeds through the MYOB BankLink software 16 years ago , and also pushed to get it into Xero. It is important to understand how it works and to use Barter on Business expenses. Many businesses and accountants do not understand how to use it properly and I have found through a recession when things got tough for many businesses it was great to have that extra line of credit with no interest charged.

        I agree that many bartercard sales persons do not understand how it works from an accounting perspective, and that is where we come in to assist. I look at a businesses expenses and then suggest getting those services on barter. We offer year end accounting and tax services 100% on barter and are saving clients between 30% to 50% off what they were paying in the cash economy. Then if clients are property investors, I suggest if you need a lawyer or a valuer we can put them in touch.
        Where can you get an interest free loan to buy a house? No where. We can buy land and property on barter. I cash convert , and buy items on barter and sell on cash to generate cash as well.
        If you give client gifts , buy them on barter. There are so many things you can buy on barter and save on dollars you just need to be careful which quadrant you trade in.

        If you want to discuss further happy to help and I can be contacted on info@accountsonline.co.nz or 04 4999035

  24. Vanessa says:

    Hi There,

    I have used Bartercard for about a year. I saw benefits. I am based in Sydney. I was able to use it to sell products that I actually had to purchase with cash and although I put a margin on, with the fees that Bartercard charges with sales and purchases, I was always finding it hard to keep up. I ended up spending on items that were not business related in order to use trade dollars. Now, I have only read a few of the comments in the feed, some are negative and a lot are from Bartercard members with positive views which I appreciate. However for an example, I sold over $2000 worth of stock which cost me around $1000 to purchase and I probably spent around $1500 of trade dollars in December. My fees were over $700. If I add this to the cost that I bought the stock for, I basically scraped in a profit. If I raised my margin, I would have exceeded the recommended retail price for the goods that I was selling which I was advised by Bartercard not to do.

    My question now is that although disappointed that it no longer works for me, I want to know how I close my account. I have sent emails to explain that I want to close it. I have no money owing. My trade balance is clear so nothing owing on that either. Bartercard aren’t responding. Has anyone experienced this?

    Happy to hear your thoughts.



    • Dave Smyth says:

      I’ve heard the same thing from a few people. Have you tried calling them? If possible, cancel your payments to them, that normally gets their attention. Just make sure that you are not obliged to stay a member for any specific period of time and you’re not breaching any other terms.

      • Vanessa says:

        The thing that bugs me is that there is no where on their website about cancellation of membership. I thought about just not using the card and being inactive, however you still get charged monthly fees under ‘Marketing’ so its super frustrating.

  25. Charn says:

    Thank you for your detailed experience about BarterCard. My business got approached by these people as well and I allowed them to come to have a talk with me, but once they mentioned about the commission (cannot remember exactly how much but I will take your word [ie 5.5%] for it ), that was when my interest in this card ended. This means you must give 5.5% discount to everyone who presents this card. Even worse, those people aren’t actually paying me, so I receive none of their cash. Nevertheless the amount I must pay 5.5% to BarterCard in cash. Why would I do that? I have not even managed to listen to them talking about 6% deduction when I use my Trade Dollars because I stopped the meeting once I heard about the commission. The whole things sounds very dodgy. It might benefit a few people who have thought over it and planned on how they are going to spend this card well. But for the vast majority of businesses (including mine) in which cashflow is important, I don’t see how this would help us with cashflow.

    Thank you for your time and effort.

  26. Claudia says:

    We joined Bartercard and used the services of its members for nearly 2 years. In that time frame we did not get one Bartercard customer wanting to trade with us.

    We were promised our services were in demand and that we should start increasing our cash flow by spending Bartercard dollars where ever possible. We did this to our peril…. we spent on services which were heavily inflated sometimes triple the normal price.

    After relocating our business address with no success, we realised that we would never be able to pay off the debt accumulated with Bartercard by selling our services (health related).

    We then decided to close our account and pay the debt off with selling items on the Auction. This however was not possible as they shut down our account and sent us to the debt collectors. Not only did we have to pay $20,000 in REAL CASH, we also received a bad credit rating which is still following and preventing us from borrowing for 5 years!!!

    What ever you do, avoid this company and stay right away!

    • Dave Smyth says:

      Thanks for posting your story Claudia That’s a real lesson to everyone to ensure that the trade goes both ways before using that “free” overdraft facility.

  27. Trevor Smith says:

    Thanks Dave for this interesting forum.

    Bartercard have just started a new deceptive marketing campaign in Perth where they send you a hand written letter supposedly from someone you know/trust.
    If you got one, check the post mark as it’s bulk mail from Perth Mail Exchange with no return address. And a fake stamp.

    Inside is a bogus newspaper tear-out from bartercard saying how great they are and a hand written “check this out” like a mate might say.

    That isn’t creative marketing… it’s deceptive crap with intent to con! Suck in the gullible.

    Sums up what bartercard are all about!

    Thanks again for this site,


  28. Rob T. says:

    I’m sorry to say it but I am another example where Bartercard has done nothing but cost me money. I am a self employed pest controller in W.A.
    I have been with Bartercard for a year now and have almost $5000 trade dollars that I can’t spend on anything worthwhile. Out of that $5000 my cash expenses are roughly as follows:
    Joinig fee. $1495
    materials to do the work. $1500
    6.5% Bartercard commission. $325
    12 x monthly marketing fee. $480

    Total cash spent. $3800

    Tax on remainder @approx 28% $336

    Bartercard commission when I spend these trade $ $325

    The bottom line is that I have spent $3800 in real cash to make $5000 in pretend money that I can’t find anywhere to spend!
    Sure, the joining fee is a once off, but how long until BC brings in an annual renewal fee? They are so greedy that it is only a matter of time.
    Ever since I registered for gst, I have refused any Bartercard work so gst would drain an extra 10% as well when applicable.

    I am sick of taking down Bartercard members and being told “no” when I ask about getting stuff on Bartercard. It seems that the only people accepting trade dollars are new nieave
    Members, ones that only accept 50/50 Cash, or ones that severely over inflate their prices. I can easily buy a $1500 trade dollar ipad off Mybc and pay cash for the postage, but how is that increasing my business cashflow?
    I canceled my advertising last month but they still take out the “marketing” fee from my bank account in cash. The bottom line is that the longer it takes me to spend my trade dollars, the more cash it costs in fees, nobody in my area accepts them anymore, just like me. It’s a viscous circle and I will probably just get the shoes one day and close my account, saying goodbye to the trade dollars which I had to pay tax on.

    • Dave Smyth says:

      Hi Rob. I feel your pain! You might be better off taking a hit and just spending the trade dollars on something frivolous so you can get out of it.

      • Rob T. says:

        Yeah Dave, I will do that to a certain extent. Still have to be careful though as when I spend the trade dollars they hit me with another 6.5% in cash. I MAY be onto someone that does embroidery and work clothes. If it works out I will get enough work clothes to last a long time!
        Almost everyone I spoke to only accepts a 50/50 cash split though if anything, so it still costs money out of people’s pockets.

        • Tony says:

          Another option could be to buy your business a vehicle using your BC$. Depreciation and maintenance are probably claimable expenses in WA, and the first year’s depreciation could be a lot – to bring it down from the BC price into real dollars (you may need a vehicle valuation?).
          Or if you subsequently find it isn’t suitable for your business – then sell it for cash, the loss on sale could also be a claimable expense?
          Prior advice from your accountant would be wise.

      • Vanessa says:

        Any trade that you spend you get hit with the 6.5% additional cash fee. I am in a similar situation where I have over $14,450 trade dollars from a $15000 limit. In order to get out of Bartercard do I have to pay back the $550 owing whether that be in trade or cash and will I still get hit with the 6.5% fee. Bartercard says it eases cash flow, it is interest free blah blah blah, with the fees for sales and purchases you are almost paying interest. I see that they have also brought in some new thing to get cash customers in. I tried to read it several times but don’t understand how it works at all. It seems to defeat the purpose of business with trade if they are now trying to get you onboard to sell to customers for cash.

    • Lazarus says:

      Tell them you want to donate some trade to a charity and if they exempt fees on charitable donations. They should do it. Give all your trade away and get the eff out. You will get a Tax deduction as well. Make sure you call all of the poor misguided people who used your services and explain to them why and offer them a 25% discount. Even with a 25% discount you will probably make more money than Trade.

  29. John says:

    The Bartercard debate rolls on and always seems to illicit strong opinions either way. My take on things as a Bartercard member for 3 years is that if you are to get any benefit at all you need to go in with both eyes open and make sure that you fully understand the concept, the cost and then weigh up whether or not it could work for your situation. Quite often people seem to join as they expect(or are made to expect) Bartercard to be a magical cure for an unrelated on-going business problem. In my case it has worked in that my company had been left with a large volume of stock with a limited lifespan. Without spending huge amounts of cash on advertising, promotion and sales commissions, there is no way we would be able to sell it down in an acceptable time frame. Bartercard has enabled us to move this stock on at full retail value in return for “non-perishable” T$’s.
    In terms of getting best ‘bang for you buck’ when spending, there is no doubt in my mind that the best return is on food, accommodation and activities where you are getting dollar for dollar value, as opposed to buying items for sale which are generally either overpriced or not something you really want, however there certainly are exceptions if you look hard enough.
    Key to making things work is having a good trade broker who keeps you informed with what’s going on in Bartercard land and it seems from some of the comments, some certainly don’t. We are fortunate to have a really excellent one who works hard to make sure our Bartercard experience is a good one and has offered invaluable advice on how best to take advantage based on our situation.
    In our particular case, we treat our Bartercard dollars as our entertainement budget. Whenever we eat out, stay in a hotel, rent a car, or do some form of leisure activity it is almost always on Bartercard. This does require a bit of research, forward planning and flexibility but well worth the effort. If properly planned, it is possible to go on holiday in New Zealand and only spend Bartercard dollars, I know as we’ve done it!
    Our first 2 years as Bartercard members with a rapidly accumulating stash of dollars was scary as we looked at ways to convert to cash or spend and we wondered what on earth we had got ourselves into but now that we have embraced the ‘entertainment’ concept this has forced us (in a good way!) to do a lot more leisure wise. In the past year, aside form numerous week-end city breaks, we have been Jet boating, on a scenic helicopter flight, sky diving, cruising and just about to go Heli-skiing. Have also bought skis and lift passes. One of the big unexpected wins, which was suggested by our broker, was to get my son, who just started uni this year, his own card which has enabled him to pretty much support himself on Bartercard without digging too deep into his student loan.
    Bartercard is certainly not for everyone but I believe there is certainly a place for it in certain business situations . Hopefully some of the insight into our experience might help some others who are struggling to know what to do with all their T$’s, i.e try living a little:-)

    • Dave Smyth says:

      Hi John. Thanks for sharing your experiences. You mention a couple of things that raised a red flag for me. One is that there is no such thing as “dollar for dollar” when it comes to comparing being paid with trade dollars as opposed to cash. Aside from the fees, which automatically mean you’re paying more than normal, most members find costs are higher or service/quality is lower when paying with trade dollars. I do agree that food and accommodation is probably going to give you comparable purchasing value though, assuming they accept 100% barter dollars. The second thing is that by using your trade dollars for personal entertainment, you are harming your business cash flow. For every T$1000 you spend on yourself, you have to pull out cash from your business (on top of what you spend!) to pay for the income tax and GST. Having said that, I understand why you’re doing this. It can be really hard to find ways to spend them on business expenses.

      • John says:

        Hi Dave. Just to clarify, when I say “dollar for dollar”, I mean the buying power of a T$ in the hand being equal to an NZ$ in terms of a Bartercard purchase. Fully appreciate there are costs incurred in getting a T$ in the first place so this is why I avoid spending on over inflated items and services which just compound the true cost issue. As mentioned, food, accommodation and activities seem to be the way to go.
        In terms of the cash flow issue caused by spending on entertainment for ourselves, this is a hit we are glad to take as the alternative would have been to drop our pants and sell off thousands of dollars worth of stock at a massive loss or even loose the perishable stock altogether. By using Bartercard in this instance we have managed to extricate ourselves from a potentially disastrous situation and come out with far more than we could have expected otherwise. As mentioned previously though, Bartercard is far from being a good fit for all but taking our case as an example, there will be other businesses out there who use it as a tool or solution to successfully address certain aspects or bottlenecks in there businesses. I think it’s unfair to unilaterally declare Bartercard a waste of money, much as it is to suggest it’s a ‘must have’ for every business. I think the truth lies somewhere in between and very dependent on individual circumstance.

        • Dave Smyth says:

          Fair comment. There are a lot of complaints about inferior service or products when buying with Bartercard, which is another reason I was querying the dollar for dollar comment. It sounds like you have quite an unusual situation there where Bartercard worked well. The main reason I started this blog was because of the lack of understanding so many people seemed to have about Bartercard’s real costs. In your case, the costs were more tha compensated by not losing all the value you had in your stock. Interesting story, thanks for sharing it!

        • Lazarus says:

          Yeah sounds like a good experience but I would wait for the accountant break down before you celebrate.

          This scenario is one of the training scenarios TCO’s use as an example of good Bartercard practice.

          I have no idea what your stock was or its profit margin or what its production cost is.

          If you have stock that is perishable that you can not sell you don’t pay tax on it. If you make a loss you may get tax breaks.

          So you sell excess stock on trade. You get Trade dollars. You have to pay tax on the profit. The greater the profit the greater the cash tax will be.
          So selling this stuff feels great, you think you have done well but have/will pay more tax in cash.
          + cash incoming trade fees

          Then because you are spending this Trade on lifestyle you do not get a cash tax deduction but rather, you have to pay income tax on that trade spent! Oh and more + cash outgoing trade fees.

          You may be better off giving you perishables away to a charity and claiming a tax deduction and actually doing good instead of giving cash to Bartercard. It will be a better feeling as well.

          • John says:

            Lazarus, one of the other Directors is a Chartered Accountant so trust me when I say that in our case Bartercard was our best option by a long way in this particular instance. Getting full retail in T$(which could not have been achieved any other way) helps compensate for the Bartercard charges. Obviously only stacks up well if a business has a healthy non-Bartercard income and what is perceived to be worthwhile purchase opportunities on Bartercard going forward to spend their T$ on. In our case it did and the Bartercard charges to us were perfectly acceptable given the alternative but fully appreciate that if a business is in trouble or with poor cashflow, then a large Bartercard sale triggering a cash requirement for tax and charges would be the last thing they would want.

  30. As a member of BC I wholeheartedly agree with the comments of the author.

    We joined bartercard about 4 years ago – big and expensive mistake!!!! I was shown a lot of companies in their contact book who had businesses we dealt with, however after joining (very expensive in itself) I rung some of the businesses enthusiastically to start working on bartercard dollars, and every one (yes, every single one) said they no longer used bartercard. The story was always the same – they couldn’t get rid of the bartercard dollars. We sold two caravans through bartercard – it cost hundreds in real cash in their fees, plus their monthly fees, in real dollars again, seriously add up – for nothing done really. Looking back, I would rather have had quarter of the value of the caravans in cash, and never earn about bartercard. To cut a long story short, we have spent three years at about $50 a month, of real cash, and still have a huge credit with bartercard, but can’t find anything that is needed to spend the dollars on. Because there are some very hungry sharks in the bartercard corporate side of things, you will find yourself paying cash every month, while working to build a credit that you can’t spend. So, I would strongly recommend NOT joining.

  31. marko says:

    What is the Court’s opinion of people being sued by BC?

  32. Andrea says:

    I’m currently being sued by BC to pay over $10k of trade back. BC was sold to me (2005) as i was just opening up my business, to use BC for a lot of my set-up costs. So i did. But i got no leads, & with poor franchise service & marketing, high turnover in staff, and the then new introduction of no-trade fees, i was told by my BC franchise to close the account (approx. 2008) to avoid these fees, that they didn’t even agree with??. BUT not told it would mean i would have to then pay the full amount back,. I was more than happy to use trade for my services (gym memberships). Any legal advice would be appreciated. I tried for years to ask to have the account re-opened so i could again try to trade, they gave me some time, but with little assistance with mailing lists etc to help me run a marketing campaign. Now they are demanding the amount in full.

    • marko says:

      No-one will give you Legal Advice here, Andrea, and the only worthwhile legal advice is that given by a lawyer. Having said that, it is annoying and distressing to be threatened like this. Given that the only “loss” to BC is a paper one (unless I have misunderstood how it works), then hopefully you can argue that fact and it may work for you. I dont think the Court likes to see a big company bashing a small business like this. But again, that’s my opinion and definitely not a legal one.

      I wish you all the best and good luck with it. Let us know how it goes. As someone who has also been recently similarly threatened by BC. I am very interested in the outcome

  33. Dave says:

    Hi All,

    Been on BC for about 8 years and had a lot of up’s and downs along the way.

    BC is not for everyone and I would be very careful before you join. They struggle to get new business signed up now, too many people have been and tried it and or know someone who has and knows of their bad experiences…..(Obviously there are some good experiences but heavily weighed towards bad).

    I suggest if you are thinking before you sign up you get your broker to “secure under contract” on going business expenses that can be covered that already exist within your current business. Then and only then should you consider joining. Don’t believe the pitch that they can find, make them find and secure these expenses first.

    I have to say that BC is working for us “JUST”, it took 6 years really before we finally got a broker that did some work and turned it around for us. We were like many above and at our wits end. They go through a massive amount of staff turnover and without a good broker to set you up don’t join (You have been warned).

    If you have a product to sell yes BC will be able to sell it, they will sell it quick and it will be to someone you would never have had a chance to get in front of before. This I fully agree with and they can open new doors. There are 1,000’s of people looking and waiting for something to buy to trade out of their dollars.
    Because of this you will never have to discount and yes you can even sell for more (You should consider the fees when you set your price).

    (The new increased fee’s by the way of 6.5% + 6.5% + 1 BC I believe will actually be the death of them, and I say that from a business that has turned over 300k with them).

    You can spend on yourself pretty easy but there is only so much food you can eat and justify.
    The key for success is it must take and cover current business expense from your cash world and turn it into trade BC$ (hopefully for a very similar $ amount) as above if they can’t find or guarantee with a contract some regular expense I would think twice before you sign up.

    If you do signup do not open yourself up for trade to quick as you will sell to much (Learnt this very quickly and the hard way).
    Use your credit line and make sure you go negative, obviously you need something up your sleeve to be able to sell to trade back if they ask you too.
    Use the “interest free” (6.5% + 6.5% = 13%) line of credit.
    It is amazing when you are 20K positive you will never hear or get help from your broker but if you are 20K negative you will soon meet that broker that has not called / seen or spoke to you since the day they signed you up.

    Final advice: Think twice make sure it is something that can take a cash expense out of your business / Always be negative / Only open yourself up to accept work or sell something as and when needed / Sell at a good margin and take into account the fees (13%).

    Good Luck


  34. Food Guy says:

    This is really interesting reading the feedback.

    I guess depending on what type of company/products/services you offer, BC may be more/less beneficial for you.

    We are a nationwide wholesale food (fruit, milk, coffee to be precise). A very traditional business in all senses. We have signed up to BC, with NO LINE OF CREDIT, as we do not require it. All a majority of our customers are corporates/businesses. Our margins are ok around the 20-25% GP. So we rely on massive volumes to keep our noses above water.

    After checking a few transactions, I find that we have been charged for 6%+ which I thought was abit high considering compared to PayPal or any other online payment receipt system which is currently costing us ~2.95% (we pay no merchant fees as compared to BC’s $99+GST p/mth).

    I’m not going to get into details of where we can spend T$ etc.. all we know is ALL our raw material suppliers DO NOT accept T$ not even CREDIT CARD without the ~3% surcharge…

    We are seriously considering putting our BC account on HOLD/STOP. I mean, if T$ is ‘the way to go’, why deduct CASH from our accounts? IRD recognises BC as taxable transactions but IRD will not accept T$ as form of GST/INCOME TAX payment.

    The classic saying is ‘…Cash is King..’, I mean if someone dropped a BC card and a wallet of cash, which one do you think someone is going to grab?

    My 10 cents worth…

  35. Food Guy says:

    Oh, yeah…

    When signing up, I added a CLAUSE in the contract….

    ‘…Either party can TERMINATE contract with one months notice… from then on, no further charges will be applied to account…’

    The sales person/BC Credit control were really sceptical about agreeing to this… I told them, if my customers can come and go as they please, why can’t I with a months notice?

    That’s my years of legal experience coming through…

    BE CAREFUL what you sign… ALWAYS, ALWAYS, ALWAYS get legal advice. I don’t think the Consumers Guarantee Act (CGA)/Fair Trading Act (FTA) fully covers this…

    My next 10 cents worth.

  36. Food Guy says:

    One final word….

    BC Joining Fee was discounted 50% than usual I think of NZD$1250.

    We were really reluctant to pay this, as discussed with the Sales Broker… Do you think we could charge our customers a JOINING FEE for our fruit, milk and coffee products???

    They’ll probably laugh at us…

    With companies like GrabOne, TradeMe, EBay, DealsOnline, etc… I think all of us can agree the digital way of selling our products or services is the way to go.

    We have also experimented with AFFILIATE marketing, Drop Shipping, Pay Per Click, Pay Per View and Pay Per Mille (show our advert with links back to our site), commission schemes for 3rd parties that are interested in making some money from our products and services.

    Really great way to make extra continuous revenue (and keeping control of the customer/sales cycle)… Check it out…

  37. Dave says:

    A very interesting Blog
    I was a member of Bartercard for a number of years – we had two companies as members. We also had issues with the fees – we also asked for our trade broker to be replaced, this resulted is little or no contact for over 12 months. I became so dissatisfied with the service – I purchased Bartercards opposition – BBX.
    I believe there is a barter model that allows good trading and does not break the cash bank. I have a marketing background and I have found the posts on this blog invaluable for formulating where I will be taking BBX in the next 12 months.
    We have been trading since time began – I am sure there is a balance between the cost to run a barter system and enabling good trades to occur.

    • angela says:

      Bbx? DEAR LORD… they are more shocking than Bartercard or Ozone ever was!! Extremely dodgy business with extremely dodgy Australian owners in trouble with the New Zealand tax man as well as a host of other illegalities. Any Kiwi business worth its salt knows this. Only Michael Touma would big note it haha!!!

      • Dave says:

        Hi Angela

        Very substantial claims against BBX and Michael Touma – please tell me more or point me to websites, information that substantiates your claims

        • angela says:

          Well haven’t I hit a nerve! It’s common knowledge amongst the industry as well as some who were substantial traders, once upon a time.

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