Bartering Booms During Economic Tough Times

By Emily Bazar
 

Even though Ron Giesler, 42, lost his job wiring oil rigs three weeks ago, the Seabrook, Texas, resident is still working as an electrician. He's just getting paid in trade: laptops, computer parts and other used goods.

When Christine Rietsch, 41, of Fridley, Minnesota, had her hours cut, she got creative so her two children could have a merry Christmas. She drew a portrait of a man's wife and son and received the Guitar Hero video game in return.

Giesler and Rietsch are among a growing number of people turning to bartering to help them survive the recession. In barter, people trade goods and services without exchanging money.

Barter "absolutely thrives in bad times," says Roger Staiger, a professor at Johns Hopkins University's business school. Last month, a Denver developer asked Staiger for help restructuring a loan. Lacking cash, he gave Staiger a Colorado ski trip, and the developer's wife is designing his Web page.

"This is part of the underground economy that does not contribute to the GDP (gross domestic product), but it absolutely contributes to helping people and fostering trade," he says.

 Giesler and Rietsch both use Craigslist. Giesler has done six barters with homeowners who need electrical work. He sold a laptop he received to help with the mortgage. Rietsch, a nurse, has done a variety of trades, such as trading a table for a chair. "If you're able to give somebody a service or good they're looking for, it saves both of you money that can go towards bills or food or gasoline," she says.

On Craigslist, postings in the bartering section were up 100% between January 2008 and January 2009, says spokeswoman Susan MacTavish Best. "Bartering is particularly popular in areas that have been hit with foreclosures," she says.

U-Exchange.com, a website that connects people who want to swap and trade, had nearly 1.1 million page views between mid-January and mid-February, says John Moore, founder of the site. During the same period last year, there were almost 362,000.

Businesses also barter. The Gulf Coast Trade Exchange has 500 members from Gulf Shores, Alabama, to Destin, Florida, who earn credit for providing goods and services to each other. "We have been getting lots of calls," says owner Fran Crumpton. "People are more concerned about the bottom line and their future."