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August 23, 2009

I Know the Barter Secret: It's a Rip-off

By Chaz Valenza

Barter brokers would like you to think that they are the solution to many business problems. According to them, trading your services for everything from advertising to medical care to vehicle maintenance is easy and fair. Learn from my experience, it stinks.


Here's my reaction to a recent letter from BARTER BROKER CORP, not their real name, as I still have an account with them worth some 2000 Bogus Bucks (BBs).


You know the barter secret - so why not share it?

[Good idea! I will.]

"You know that BARTER BROKER CORP can be an incredible tool to help you stay busy and profitable even in today's challenging business climate.

[Not true. For starters there's the $20 per month fee payable only in U.S. $$$ and then there's the 10 Bogus Bucks - my deliberately pejorative term for barter broker money - each month just for having an barter account, but that's trivial because BB's aren't all they're cracked up to be.]

"Why not share the benefits of being a BARTER BROKER CORP member with your business friends and earn a nice bonus for yourself?

[Why not? Because as soon as they find out what scam BARTER BROKER CORP is I won't have any business friends anymore and they are much more important to me than any large company.]

"Helping us to grow directly helps you increase the goods and services available within the Marketplace, and gives you direct access to new trading partners.

[Okay, business friends, this is how it's suppose to work. You offer your service or product for Bogus Bucks that I've earned by selling my service or product for Bogus Bucks to someone else. Now, each time a Bogus Bucks transaction occurs BARTER BROKER CORP charges both you and me 5% in real U.S. $$$. Notice how they don't accept Bogus Bucks. Hmmmmm? So on every “trade” they make 10% in real U.S. $$$, which are good everywhere like for paying the mortgage. Try doing that with Bogus Bucks.]

"As we announced in our July inaugural CEO email, we are adding nearly 1,000 new members to our Marketplace every month! Please take a few moments to contact your local Broker with a list of people who you have encouraged to open a BARTER BROKER CORP account.

[One-thousand new suckers every month! That's great if you're in on this game and want to take advantage of new players. Here's why. The new “friends” tend to play by the rules, offering their products and services at their retail U.S. $$$ price or rate. That's when you want to trade with them, like a new roof for 6000 Bogus Bucks. Poor sap roofer just paid $3,000 for roofing material and $1,500 in labor. So he or she has just traded $4,500 for 4500 Bogus Bucks and made a whopping 1500 BBs profit. Such a deal!]

"BARTER BROKER CORP members who refer 3 new Preferred Members will have their own Association Fees waived for up to 13 full cycles (one year).

[Oh, yeah, I forgot their months are only four weeks each. That puts the annual fees at $260 U.S. That's a lot of money.]

"These members can be added at any time during the year. Your Association fees will be waived immediately for the year after the third member is added, as long as all 3 members continue to be Preferred Members.

[I have no idea what a Preferred Member is, but my bet is it's even more expensive than being a run-of-the-mill member. I'll bet no one stays a Preferred Member long. Let me tell you what happens after your first couple of trades. You realize you've got all these BBs and you go to spend them and you find out:

A) Nobody, but nobody is charging their normal retail price, they inflate their prices because they already know BBs aren't worth a $1 each.

B) Nobody, save the fresh meat, will accept BBs for material cost or anything else they have to buy for the job, they'll want U.S. $$$ for that part of the purchase.

C) Most of what is available is crap nobody wants. Time shares, both sublets and sales. Ugly jewelry. Website design. Limited legal service offerings like cleaning up your credit report. Overstock clothes. Same day seats at professional sports events, run, run, run. Designer watches with prices between 1700 to 2500 BBs. Seats at kiddy shows. Advertising space nobody wants. Gift certificates at restaurants that aren't accepted for drinks, tax or tip. Cars that are lemons. Tanning, facial, and message salons that want to sell you cosmetic products for U.S. $$$ only. Art framing (labor only). Etcetera.

Oh, and that new roof? Forget it, that's not happening. You see, our roofer has by now realized he had to pay $300 US when he got his 6000 BBs, and he's going to be charged $300 US more when he goes to spend them. I've been trying to spend my last 2000 BB for at least three years. I can't find anything that's worth the $200 US in transaction charges.]

"Please take action today to save yourself some money...

[Another good idea! I've got to call tomorrow and tell them to stick their BBs up their butt. I just keep hoping I can turn them in for something, anything half worthwhile.]

"...and help new members join our dynamic Marketplace.

[Dynamic in that they've got to keep finding new blood or the entire scam crashes and burns. Why did he capitalize marketplace? Oh, I get it. It's a proper name not a reality.]

"Thank you, Chairman and CEO, BARTER BROKER CORP"

[P.S. If you thought there was a tax advantage to barter there isn't. The states and feds got wise years ago. Full sales & use tax, no break on income or any other tax. Go Bogus Bucks!]

Submitters Bio:

Chaz Valenza is writer and small business owner in New Jersey. He earned his MBA from New York University's Stern School of Business. His current feature film project is "Single Point Failure" an insider's account of how the Reagan Administration caused the greatest tragedy of the space age based on Richard C. Cook's book "Challenger Revealed." He is a former Director of Public Information for Planned Parenthood of NYC. His website is: www.WordsWillNever.com