barter

 
Dictionary:

barter

  (bär'tər) pronunciation
Barter

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v., -tered, -ter·ing, -ters.

v.intr.

To trade goods or services without the exchange of money.

v.tr.

To trade (goods or services) without the exchange of money.

n.
  1. The act or practice of bartering.
  2. Something bartered.
adj.

Of, relating to, or being something based on bartering: a barter economy.

[Middle English barteren, probably from Old French barater. See barrator.]

barterer bar'ter·er n.
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The act of trading goods and services between two or more parties without the use of money. Bartering benefits companies and countries that see a mutual benefit in exchanging goods and services rather than cash, and it also enables those who are lacking "hard currency" to obtain goods and services.

Investopedia Says:
An example of a barter arrangement would be if someone built a fence for a cattle farmer in exchange for food. Rather than the farmer paying the builder, say, $1,000 for the fence, he would give the builder a similar value in beef.

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It's a part of everyone's life, and we all want it, but do you know how it gains value and how it is created? What Is Money?
Take a look at the tenets, assumptions and challenges of monetarism's principle theory. What Is the Quantity Theory of Money?


 

Trade of goods or services without use of money. When money is involved, whether in such forms as wampum, checks, or bills or coins, a transaction is called a Sale. Although barter is usually associated with undeveloped economies, it occurs in modern complex societies. In conditions of extreme inflation, it can be a preferred mode of commerce. Where a population lacks confidence in its currency or banking system, barter becomes commonplace. In international trade, barter can provide a way of doing business with countries whose soft currencies would otherwise make them unattractive trading partners.

 

System of trading goods and services for advertising time or space. Long before broadcast advertising came into being, hotels would offer transferable documents claled "due bills," each of which had the value of one day's stay per room, to newpapers and magazines in return for advertising space. The newspapers or magazines would then use the due bills for their own personnel or sell them at a discount to anyone desiring a reduced hotel rate. The cost of the advertising space was figured on the basis of the net price of the due bills. In other words, if the rate card for the advertising space was $20 per column inch, and if the hotel rooms were rented at $20 per day, but the due bills each sold for $10, the barter arrangement would be at a rate of two-to-one, or two due bills for each column inch of space.

In the early days of radio, cash was tight and studio needs often exceeded budgets; thus, much advertising time was sold through barter. This system continues today throughout the broadcast industry, and barter has become a highly competitive business. There are companies called barter brokers, who handle only barter business. There are also companies who have become wholesalers of broadcast time by building inventories of time accumulated through various barter situations (called barter time).

 

Direct exchange of goods or services without the use of money or any other intervening medium of exchange. Barter is conducted either according to established rates of exchange or by bargaining. Barter is common among preliterate societies, particularly in those communities with some developed form of market. Goods may be bartered within a group as well as between groups, although gift exchange probably accounts for most intragroup trade, particularly in small and relatively simple societies. See also currency.

For more information on barter, visit Britannica.com.

 
This entry contains information applicable to United States law only.

The exchange of goods or services without the use of money as currency.

Barter is a contract wherein parties trade goods or commodities for other goods, as opposed to sale or exchange of goods for money. Barter is not applicable to contracts involving land, but solely to contracts relating to goods and services. For example, when a tenant exchanges the performance of various maintenance tasks around a house for free room and board, a barter has taken place.

 

The exchange of goods or services for other goods or services, rather than for money.

 
Word Tutor: barter
pronunciation

IN BRIEF: To pay for goods with other goods.

pronunciation I will use my wool to barter for your grain.

 
Wikipedia: Barter
For other uses, see Barter (disambiguation).
A 19th-centure example of barter: A sample labor for labor note for the Cincinnati Time Store. Scanned from Equitable Commerce by Josiah Warren (1846)
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A 19th-centure example of barter: A sample labor for labor note for the Cincinnati Time Store. Scanned from Equitable Commerce by Josiah Warren (1846)

Barter is a type of trade that doesn't use any medium of exchange, in which goods or services are exchanged for other goods and/or services. It can be bilateral or multilateral as trade.

Barter and money are different means of balancing an economic exchange. Barter is used in societies where no monetary system exists. When there is one, it is also used, especially in economies suffering from a very unstable currency (as when hyperinflation hits).

Transaction issues

Why was it done?

  • A transaction is possible when coincidence of wants of economic actors enables an exchange cycle between their bids: each party must be able to supply something another party desires.
  • Some entities develop a system of intermediaries who can store, trade, and warehouse commodities, but who may suffer economic risk.
  • Others develop a system with a virtual value unit ("barter dollars," or "trade credits," for example) to measure and balance exchanges, very similar to a monetary system.
  • Multilateral barter is more complex to settle but allows trades that would not be possible with bilateral barter. However with the use of a singular platform - like a barter exchange, bartering amongst businesses is easily facilitated, even if the barter trade is done across borders.

History of barter

To organize production and to distribute goods and services among their populations, many pre-capitalist or pre-market economies relied on tradition, top-down command, or community democracy instead of market exchange organised using barter. Relations of reciprocity and/or redistribution substituted for market exchange. Trade and barter were primarily reserved for trade between communities or countries. It is also used when the monetary system failed to measure the economic value of goods.

Barter becomes more and more difficult as people become dispossessed of the means of production of widely-needed goods. For example, if money were to be severely devalued in the United States, most people would have little of value to trade for food (since the farmer can only use so many cars, etc.)

It is used on important transactions between firms or countries to exchange commodities, when monetary constraints are too expensive for the economic actors.

A well-known example of multilateral trade is the triangular trade.

On the west coast of the United States the Beyond Barter organization extends the concept to a system based on free sharing of services. Although there's no attempt to balance contributions in individual transactions, controls ensure that members are not overburdened.

Money used to be considered as simpler for small trades; but use of the Web has changed that perception, especially for Swapping.

In finance

In finance, the word "barter" is used when corporations trade with each other using non-money or "near-money" financial assets, such as U.S. Treasury bills.

Corporate Barter

Corporate Barter entails the use of a currency unit called a "trade-credit". That which the trade-credit represents, must be known and guaranteed (contractually) as a deliverable in order to eliminate ambiguity and risk. Trade-credits are redeemed with cash much as a consumer might use a coupon toward desired goods in a supermarket.

Corporate Barter can be a powerful financial implement used to provide full recovery of value to an asset with an impairment in values (book value to market value). In a well constructed barter transaction, Company A receives full book value for an impaired asset (x), in exchange for another asset (y) which Company B owns. The asset (y) is typically something (acquired capacities in commonly purchased goods or services) which Company B owns, which company A intends to purchase during the course of day-to-day business. Examples are things such as print, shipping, packaging, travel, etc. The result is a full recovery in value for asset-x for Company A by the conclusion of transaction term.

Often maligned due to shaky beginnings, todays barter transactions have come along way. Many companies have done, and currently engage in successful Corporate Barter transactions. Practices such as requesting references help to significantly reduce risk.

Swapping

Swapping is the increasingly prevalent informal bartering system in which participants in Internet communities trade items of comparable value on a trust basis.

While swapping is an excellent way to find and obtain items that are inexpensive, it relies upon honesty. A dishonest participant might arrange a swap, and then never complete their end of the transaction, thus getting something for nothing. This practice is called swaplifting,[citation needed] a pun on shoplifting. The victim's recourse is often limited to shunning the swaplifter, or taking him to small claims court.

Complex business models based on the concept of barter is today possible since the advent of Web 2.0 technologies. LicenseBarter[1] - a barter platform for DEPB / DFRC licenses - is a good example for B2B barter.

Nonstandard uses of the word "barter"

As of 2007, it is popular (especially on UK daytime television) to use the word "barter" in place of "haggle".[citation needed] To Buy Or Not To Buy uses the word in one of their catchphrases: "Will you barter or scarper?" It is commonly understood that the guests on the show will be paying solely with money and not, for example, offering them part exchange on their A reg Ford Cortina.

See also

External links


 
Translations: Translations for: Barter

Dansk (Danish)
v. intr. - tuskhandle, byttehandle, kompensationshandle, udveksle varer
v. tr. - tuske, drive byttehandel med
n. - tuskhandel, byttehandel
adj. - tuskhandels-, byttehandels-

Nederlands (Dutch)
ruilhandel, ruilen, marchanderen, opgeven, handelen met gesloten beurs

Français (French)
v. intr. - troquer
v. tr. - échanger, troquer contre
n. - troc, échange
adj. - de troc

Deutsch (German)
v. - Tauschhandel treiben
n. - Tauschhandel
adj. - Tauschhandel betreffend

Ελληνική (Greek)
v. - ανταλλάσσω, κάνω τράμπα
n. - ανταλλαγή σε είδος, τράμπα

Italiano (Italian)
barattare, baratto

Português (Portuguese)
v. - trocar
n. - intercâmbio (m), escambo (m)

Русский (Russian)
производить бартерный обмен, бартер

Español (Spanish)
v. intr. - trocar, permutar
v. tr. - trocar, permutar
n. - permuta, trueque
adj. - comercio de trueque, de permuta

Svenska (Swedish)
v. - idka (driva) byteshandel, pruta, köpslå, byta
n. - byteshandel, bytesobjekt

中文(简体) (Chinese (Simplified))
作物物交换, 进行易货贸易, 讨价还价, 以作为交换, 拿...进行易货贸易, 物物交换, 实物交易, 实物交易的

中文(繁體) (Chinese (Traditional))
v. intr. - 作物物交換, 進行易貨貿易, 討價還價
v. tr. - 以作為交換, 拿...進行易貨貿易
n. - 物物交換, 實物交易
adj. - 實物交易的

한국어 (Korean)
v. intr. - 물물 교환을 하다
v. tr. - ~을 교환하다, ~를 팔다
n. - 물물 교환, 교역품
adj. - 물물교환의

日本語 (Japanese)
n. - 物々交換
v. - 物々交換する

العربيه (Arabic)
‏(فعل) قايض (الاسم) مقايضه, تجارة بالمبادله‏

עברית (Hebrew)
v. intr. - ‮עסק בחליפין‬
v. tr. - ‮החליף‬
n. - ‮סחר-חליפין‬
adj. - ‮של סחר-חליפין‬


 
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Dictionary. The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2007, 2000 by Houghton Mifflin Company. Updated in 2007. Published by Houghton Mifflin Company. All rights reserved.  Read more
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Economics Dictionary. The New Dictionary of Cultural Literacy, Third Edition Edited by E.D. Hirsch, Jr., Joseph F. Kett, and James Trefil. Copyright © 2002 by Houghton Mifflin Company. Published by Houghton Mifflin. All rights reserved.  Read more
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