Your Money's No Good Here

One warm day in early spring, a group gathered at a small inn near a southern city, to discuss subjects of common interest. They dined on venison, sipped fine wines, and got massaged with essential oils. Three days later, they left without having spent a penny—but the inn got a new roof out of the deal.

Barter, or exchange, is the oldest form of doing business; it's existed since the beginning of civilization, thousands of years before King Croesus of Lydia began minting coins. But this meeting wasn't held long ago or in a faraway land; it took place in May at Atlanta's Chateau Elan Winery and Resort, where 125 members of the National Association of Trade Exchanges (NATE) met for their annual conference.

Rough Trade

The most important thing to understand about barter, says Tom McDowell, NATE's executive director, is that "we don't trade 'stuff.' " Think of it this way: You plan meetings, for which you receive a paycheck that you use to pay for food, rent, and so forth. Now imagine that the grocery store and the landlord were instead companies that supplied your meeting. That's how barter works, says McDowell: "We put businesses together to do business with each other."

All these businesses belong to a local trade exchange, which assigns everything a dollar value (a "trade dollar," with the same value and taxability as the Uncle Sam version) so that when products or services are bought or sold, they're credited or debited to each entity's account at the exchange, which is responsible for managing the currency.

Why not use cash? Because belonging to a barter group allows you to find new business, McDowell explains. Thus the roofer who topped off the Chateau Elan wouldn't normally have done work for the hotel, but the two were brought together because of their mutual membership in the local barter group, which is one of 400 such companies in North America. "We have doctors, dentists, attorneys, funeral homes, even colleges that will trade a four-year or a doctoral program," boasts McDowell. "If you can imagine it, you can trade for it. I've traded for Rolls-Royces."

Planning a meeting purely through barter has peculiarities, the biggest being the need for a hotel that belongs to one of the 80 or so member societies of NATE. But to judge from past venues, this isn't much of a problem. Since its 1984 launch, NATE's annual meeting has been held at high-end hotels from the Hyatt Regency Chicago to the MGM Grand in Las Vegas.

Nor is NATE limited to trade. Next year, it's meeting in Toronto, where because of the favorable exchange rate, McDowell will resort to using cash. In 2007, he hopes to return to the Chateau Elan. But now that the hotel has a new roof, how will he pay? "Actually," he admits, "we're looking at recarpeting the place."