Barter shops 2

Previously we discussed the concept of barter shops. In this we will look to develop the basic idea even further.

Collecting trash

Though existing barter shops only accept reusable goods, it might be an idea for these shops to accept certain types of waste as well. Think, for instance, of old batteries, old electronics, used oil or textile waste. Most households only produce a little of these types of waste, so a central collection center would be more efficient.

Just as in case of bringing reusable goods, people will earn credit – though the amount of credit will be less. Both the type and amount of delivered trash will determine the number of points. The shop will on its turn sell the waste to a recycling business.

The money earned this way will reduce, or possibly eliminate, the amount of subsidy needed to pay the shop’s expenses such as rent and energy bills. (For instance the barter shop in Nijmegen receives a small subsidy to pay for its expenses.)

It is important to note that this is idea is anything but new. The city of Curitiba has a program where citizen are paid with bus tokens in returned of collected trash. This waste is recycled and the resulting revenue is used to fund the additional fuel used by increased bus use. And importantly this scheme has significantly reduced poverty.

Repair

Most, if not all, barter shops only accept clean and unbroken goods, as they as a general rule do not repair stuff. However, many thing are quite reusable after a small repair.

A barter shop could hire someone to do the repairs and reward him or her with credit at the shop. The awarded credit will be equal to the added value. So if a good is accepted by the shop for, say, 10 points and the value after repair is 15 points, the repair person will get 5 points.

Negative balance

An interesting question is whether costumers of the barter shop should be allowed to have a negative balance. All the barter shops I have examined do not allow negative balances but most give new members 15 points of credit as “welcome present”.

One benefit of allowing negative balances is that it enables (poor) people to obtain tools from the shop, which could be used to provide some services. For instance one could buy a lawn mower and start a mowing service.

However, a potential problem of negative balances is the so-called free-rider problem, i.e. someone might “buy” goods and subsequently jump out of the system without offering any goods or services themselves. Though this problem might be solved by implementing a limit on negative balances.

From a theoretical perspective, one could argue that the barter shop itself runs a negative balance. If you bring your old TV for, say, 10 points, the shop will have a negative balance of 10 points. Once the shop sells anything this process is reversed.

Networking

In the Netherlands alone there are at least five barter shops. Though there is some cooperation between those shops, most operate on a local base. A network of barter shops has several advantages.

First of all, is promotion of the concept. A small neighbourhood barter shop does not have the resources to promote itself, but a national network of, say, fifty shops across the country could easily run a national campaign. Wider acquaintance among the general public will result in both increased supply and demand.

One problem several barter shops encounter is oversupply of certain categories of goods. An isolated shops has no choice but to stop accepted those goods and this is exactly what most barter shops do. But within a network of barter shops, oversupply in one area is offset by under supply in another.

Also networking will allow people to spend credit earned at one shop at another shop. A simple electronic clearing system could handle such transactions without any trouble.

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