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As with WIR, businesses are registered in a directory, which members use to find
new trading partners. In doing so they create extra business for themselves and at
the same time save national currency for when they need it.
Businesses are charged a joining fee, although this can be negotiated down.
Each new member is then given an interest­free overdraft and can begin trading
immediately. For each transaction there is a charge for both buyer and seller of 5 per
cent commission in the national currency (cash), plus 1 per cent in trade dollars.
Unlike Bartercard, which insists that all transactions are carried out in trade dollars,
with ITEX some deals can be done in a mix of trade dollars and cash. Members can
trade internationally; some do this through the Internet, while others go through an
ITEX international trade coordinator.
New members are often signed up when exisiting participants want to spend
money but there is no one in the directory with goods they want to buy. In an
interview in 1999, Ross Vessey, founder of New Zealand’s ITEX brokerage in
Wellington in 1997, said, ‘I wrote to my members saying if there are people you want
to do business with, just tell me and I’ll sign them up. I do a lot of brokering. I put
deals together. No bank does that. I know all the members.’ 13
In trade barter there is no issue with tax avoidance. Income tax is paid as though the
income was in the national currency, while a goods and service tax is paid and
claimed in the same way. On this subject, Ross Vessey had a suggestion for
governments: ‘If the Inland Revenue Department recognises trade dollars as income,
it would be logical that they accept trade dollars as payment for tax.’ 14
Vessey said that the characteristics of good traders are as follows:
• They must have a healthy cash flow. Trade barter isn’t a parachute for a failing
business.
• They must have available excess capacity in some form – spare rooms for rent,
spare tables at a restaurant, spare appointments, or excess stock or time.
• They must operate on a healthy margin. For this reason, no computer businesses
can join – their margins are too low.
• They must have a positive attitude towards trade.
• All goods must be sold at retail price. As was discovered by the WIR scheme (see
page 000), barter schemes don’t work if there is discounting.