Bartercard myths: setting the record straight
It’s a simple concept taking an oldfashioned idea, so why is there a lack of understanding when it comes to Bartercard? Putting the record straight, here are some of the most common myths about Bartercard and the truth behind them.
I WON'T BE ABLE TO SPEND MY TRADE DOLLARS
Probably one of the biggest objections to joining the network. When you join the network, a comprehensive business analysis is conducted so we can identify potential suppliers already available in the 6,000-strong member network. If there are insufficient suppliers available to suit your specific business requirements, we will work with you to bring on additional new suppliers to satisfy your needs. Many of Bartercard’s top trading members have successfully improved their business profitability by being proactive in their recommendation and referral of new suppliers.
We don’t claim to be able to provide all members with everything they need. We do find that when members are engaged and communicate with their Bartercard branch, appropriate spends can be identified.
Bartercard is also seen as an excellent way to reward high performing staff. Some businesses even give staff their own Bartercard cards, which is credited each quarter based on performance. It’s a great opportunity for individuals to make lifestyle purchases.
I CAN'T GET MY CORE SPENDS USING TRADE DOLLARS
This one has some truth to it. Some expenses (such as utilities, rent, wages) do require cash payment, so it's not realistic for a business to run entirely on Bartercard without cashpaying transactions. We always suggest Bartercard is in addition to your existing cash business (and not a replacement), and should make up approximately 10-15 percent of your business. A dedicated Trade Broker team will work with you in identifying opportunities to spend, and help you source products on trade.
IT'S A TAX DODGE
Bartercard income should be viewed as you would your cash income. There are no inherent tax advantages or disadvantages just because you are a member of Bartercard. Bartercard is a marketing tool, not a tax tool.
From an accounting and tax perspective, there is no difference between cash and Trade Dollars with sales being recorded as income, and purchases being recorded as an expense or asset. GST is payable on sales and deductible on purchases.
THE FEES ARE TOO HIGH
Bartercard charges a minimal monthly service fee which is tax deductible. A fee is also charged on all transactions.
The average Bartercard transaction fee is 7.5 percent (which is low in comparison to daily deal websites and discount sites who charge approx. 15-20 percent of the sale price and stipulate the offer must be at least 50 percent of the original sale price). The fees cover provision of a dedicated Trade Broker team, full e-commerce capabilities, proactive marketing of the member business to over 6,000 businesses nationwide, online monthly statements and an interest-free line of credit.
To read up on other myths such as ‘Everything is overpriced’ and ‘I don’t have excess capacity all the time’, visit http://content.bartercard.co.nz/blog/ bartercard-myths-setting-the-record-straight.