When Boston Market made a major purchase of national TV advertising time late last year, it negotiated to pay a portion of the cost with gift cards. With the money the Golden-based restaurant chain saved, it accelerated its remodeling plans.
When Urban Chefs Grill & Catering recently handled a large party for Denver Magazine, it took payment in “trade dollars” — not cash — on a barter exchange. Owner Jim Bernat used those earnings to have an old RV trailer refurbished for mobile catering and for personal expenses such as dental, chiropractic and veterinary bills.
“Times are tough and money’s tight,” Bernat said. “This seems like a good way to conserve cash and generate business you wouldn’t otherwise have.”
Bartering — a practice that predates the creation of currencies — is alive and well among businesses of all sizes. These days, however, it often is done through brokers or trade exchanges and rarely involves direct trading of goods and services by just two parties.
The recession gave a boost to what is now called modern bartering, exchange trade, reciprocal trade or corporate trade, as companies sought to preserve cash. The trend has continued during the slow recovery because bartering allows companies to wring value from excess capacity and to find new customers, advocates say.
“Consumer demand is down,” said Gordon Zellner, whose Colorado company, Evergreen-Partners, arranges trades between large corporations and media outlets. “Companies are ramped up for volumes that just aren’t happening. Trade is a creative option to release some of that pressure.”
Zellner, who brokered the Boston Market deal, also recently helped a national sporting-goods chain unload aging snowboards in return for advertising. The boards ended up selling through an online retailer and small sporting-goods stores.
Barter transactions, growing at a rate of 7 to 8 percent a year, now account for an estimated $13.5 billion annually in the U.S., said David Wallach, president of the Portsmouth, Va.-based International Reciprocal Trade Association. That’s a tiny portion of the $14 trillion U.S. economy, but Wallach said it has the potential to grow dramatically.
IRTA provides a “universal currency” that companies use for purchases and sales on more than 100 barter exchanges. Those exchanges, which range from small, local operations to publicly traded companies, typically collect fees on each transaction.
Annette Riggs of Westminster started the Community Connect Trade Association in 2008. She has 250 business members now and expects to add 100 more during the next two months. The exchange queries members about what kinds of products and services they need and then recruits those businesses, she said.
“One thing people ask is ‘Why would I take payments in trade credits instead of cash?’ But it’s not ‘instead of,’ ” she said. “This should be new business, to bring in new customers. It’s not replacing your cash business.”
Greg Griffin: 303-954-1241 or ggriffin@denverpost.com
