Bad economy sparks interest in bartering

Thousands of Christmas gifts will be available at a Mesa trade fair this month, and no money will be needed to purchase them.

But the holiday gifts will be available only to a select group of invitees who are members of the Arizona Trade Exchange.

The organization will sponsor one of the state's largest barter trade fairs Nov. 14 at the Mesa Marriott Hotel in downtown Mesa. The fair will offer merchandise ranging from cars and bicycles to jewelry and gift baskets. But only members of the exchange and their employees will be able to make the cashless acquisitions.

The exchange is a bartering organization in which member companies provide products and services to other members in exchange for their products and services. The exchange acts as a third-party record keeper of the transactions.

Under the rules of the exchange, when one of the 585 members provides a service or product without charge to another member firm, the first company earns trade credits, which it can then use to purchase a service or product from any other member in the exchange without having to pay cash.

One trade credit is considered equal to $1, which ensures that goods and services are bartered on an equal-value basis, said Rob Miller, president of the Arizona Trade Exchange.

He cited the example of an attorney who could provide free legal services for a member of the exchange, then use the trade credits he earned to obtain braces for his child from an orthodontist member. Subsequently the orthodontist could use trade credits he earned to obtain services from another member, and so forth - while everyone keeps cash in their pockets.

Members make a one-time payment of $495 to join and pay a monthly fee. Also the exchange takes a 12 percent cut of every transaction payable in cash, which pays for the staff and other expenses needed to maintain the organization.

Members have to pay any applicable sales or income taxes.

The trade fair is held once a year to allow member firms and their employees to use their accumulated trade credits to acquire Christmas items and gifts supplied by member companies, Miller said.

In lieu of cash Christmas bonuses, many member companies will give their trade credits to employees so they can attend the event and buy Christmas presents, he said.

About 600 members and employees are expected to attend.

"They can do their holiday shopping without cash," Miller said. "In these economic times there would be many members that would have a pretty slim Christmas without this."

Exchange members are doing more than $6 million a year in transactions, up about 20 percent in the past year, Miller said. The economic recession has contributed to that growth, he said.

"Everyone is slow now," he said. "This is a way to increase their business."

Lee Fiet, owner-manager of the Anchors Away travel agency in Mesa, said joining the exchange was a good way to develop contacts when he moved to the Valley in 1999. He has been with it ever since and has also joined several other barter groups.

"It put me in immediate contact with about 500 other people," he said.

In exchange for providing cruises for other members, Fiet has received many services for his home and business including a home swimming pool, auto repair, carpeting, landscaping, printing and advertising.

He added that he completes his Christmas shopping in about six hours at the annual trade fair each year.

"Our annual big deal is doing our Christmas shopping at the trade show," he said.

Jennifer Funicello, owner of Az Party Pals, a Mesa-based business that provides clowns, Santas, superheroes and other entertainers for birthday and holiday parties, said she will offer gift certificates at the trade fair that will allow buyers to provide a party for friends or family.

"We enjoy it," she said of the barter exchange. "It brings you business you might not get otherwise."