Bartering Gains Steam

ROBERT SIEGEL, host:

Let's say you install air conditioners and times are tough; business is down this summer, even though it's hot. But your repair van needs a new transmission. So what do you do? Well, if you don't have the cash on hand to repair the transmission, there is an alternative. You could barter.

Chances are there's a mechanic out there whose garage is in desperate need of a new air conditioner, and there are entire networks set up all over the country meant to connect one need with another, all without so much as a dollar changing hands.

Mike Krane is president of Green Apple Barter Service in Pittsburgh and joins me now. Welcome to the program.

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Mr. MIKE KRANE (President, Green Apple Barter Service): Thank you.

SIEGEL: And perhaps you can begin describing how this works. Does it require, if I'm the air conditioner installer, must you have both an air conditioner installer and a transmission shop both in need of service?

Mr. KRANE: Well actually, it's simpler than that. Let's take a look at, first off, the air conditioner repairman. He will call his local barter network. We will send new business to him, okay? It might not necessarily be the transmission shop. We might send him to the local dentist, restaurant, whatever. He'll do the job for them. Rather than be paid in cash, he'll be paid in a credit within our system.

Those credits go into his account. Let's say it's a $500 deal he did. He now has $500 worth of credit to spend with anyone else in the system. So we don't have to find a transmission person per se who needs their air conditioning repaired.

SIEGEL: Now, someone from the IRS who might be listening would say another nice thing for you guys is that you're not paying taxes on these transactions.

Mr. KRANE: Oh, no, no, no, no. That's not true. I think back in the mid-'80s, the IRS came up with a Form 1099-B. Now as a trade exchange, we're required by law to report all barter sales to the IRS, and that 1099-B would be an aggregate total of all the sales during the year.

SIEGEL: So tell us some interesting barter deals, some interesting needs that have been satisfied by the Green Apple Barter Service.

Mr. KRANE: Well, I always tell people, they say what do you trade for, and I always get a chuckle out of them when I say it's everything from breast implants to flat roof repair, and typically I get what do you mean by that, and what I mean by that is it's virtually everything.

You know, take a look at the plastic surgeon. The reason he would barter, if he has time that's not booked, better to earn barter dollars during that unbooked time than earn nothing at all.

SIEGEL: But when you say that, is that a hypothetical, or do you actually have a plastic surgeon who has done breast implants?

Mr. KRANE: Oh no, for barter.

SIEGEL: Yeah, yeah, I see.

Mr. KRANE: Oh yeah, we do that on an ongoing basis, okay? We trade for everything from vacations, college tuition...

SIEGEL: College tuition?

Mr. KRANE: Yeah, we have schools. Now take a look at a college's position. If they take a new student in, that student's going to sit in the classroom and really not have much of a cash impact on the school, okay, if they have unsold space.

We send a new student in, that can generate up to, you know, $20,000, $30,000 dollars a year in tuition credit via barter for that school. What we have schools do, they'll take that credit, they might buy paving for the institution. They might buy copiers. They've bought mattresses, you know, for the dorms.

SIEGEL: Or they could get a breast implant.

Mr. KRANE: Or if they so desire. I don't always recommend that, but it's whatever they need.

SIEGEL: Well, Mike Krane, thank you very much for talking with us about it.

Mr. KRANE: Okay, Robert, thank you.

SIEGEL: That's Mike Krane in Pittsburgh, where he is president of Green Apple Barter Service. By the way, do people barter green apples in the service?

Mr. KRANE: Not really.

(Soundbite of laughter)

SIEGEL: Okay.

(Soundbite of music) Transcript provided by NPR, Copyright NPR.