With the dollar well drying up, businesses look to bartering: 40,000 members swapping everything from horses to hotel rooms using credits.

Tough economic times are a magnet for new members--if you're running a commercial or retail barter exchange.

"Businesses are looking for alternative ways to gain additional business and maximize their unused capacity," said Ron Whitney, executive director of the International Reciprocal Trade Association, an industry group for barter exchanges with headquarters in Rochester, N.Y.

As for the exchanges themselves, "Now is a good time to start a barter exchange or grow the one you have," said Catherine Cohen, who co-owns Phoenix-based Premier Barter with her husband, Barry. In March 2007, Premier acquired Barter of San Diego for an undisclosed amount in a cash-and-barter deal and recently partnered with previous clients to open a branch in Firestone, Colo., midway between Denver and Fort Collins. Premier has four employees, with one of them in San Diego.

This September, Premier will celebrate its fifth anniversary. The company has 275 members in Phoenix, 130 in San Diego and 35 in Colorado, according to Cohen.

A commercial or retail barter exchange is a company that serves as a third-party record keeper for transactions among members of the exchange. Members use noncash currency, or barter dollars, to buy and sell goods and services. All proceeds from the sales are considered taxable income.

Point System

Individual members or married couples pay a $595 one-time fee to join Premier Barter. Anytime a member either buys or sells goods or services from the exchange, Premier receives 5 percent in cash and 2.5 percent in barter dollars per transaction. One barter dollar equals one U.S. dollar, and barter dollars come back into the system as points. Reciprocal relationships with other exchanges empower Premier members to exchange goods and services with more than 40,000 bartering exchange members in the United States and Canada.

Teresa Manley, co-owner with her husband Dan of Angels Landing Country Inn and Retreat Center in Julian, uses her Premier membership to trade hotel rooms, wedding facilities and holiday parties for barter credits.

"The nice thing about barter is the points go into your account," she said. "You don't have to spend them right away."

Manley has spent accumulated barter dollars on all manner of merchandise-including brakes and realignment services for her car, booth rentals at trade shows, accounting and tax services, and even her son's orthodontia work.

While weekend guests at Angels Landing are usually cash customers, midweek trade includes exchange members who book on a noncash basis.

"They'll come and stay on a Monday or Tuesday when that room would have been empty," said Manley.

Sometimes she procures wine with barter points and sells it for cash in the hotel restaurant.

A patron who buys a meal with barter dollars will tip with cash dollars. "... The tip is often generous--maybe 20 or 25 percent," Manley said.

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Soft advertising is another barter option. Exchange members "tell their friends about the inn, which translates into cash customers," she said. The resort attracts families who like the resident animal life--including an appaloosa horse Manley purchased on barter.

High-Ticket Deals

Premier Barter's largest-ever noncash transaction was the purchase of a $114,000 opal. High-ticket deals such as land sales are frequently a mix of cash and barter points.

"You might barter the $10,000 deposit and do the rest in cash," said Cohen.

In 2007, Premier hosted 9,380 transactions totaling $3.18 million. As a regional exchange with bricks and clicks capability, the company fosters face-to-face and online communication. Members meet and mingle at quarterly network mixers. Weekly e-mails include new-member profiles and tips for spending and earning barter dollars. An online user's guide helps members navigate the company Web site and find goods and services they need.

"The exchange calls me when someone needs a copier," said Bill Dorman, owner of Dorman's Copy Products in San Diego, who views bartering as a marketing tool. He favors regional exchanges for their access to local rather than far-flung clientele. "Sometimes big countrywide exchanges want you to send them toner," he said. "I mostly sell and repair copiers, but I don't want to send machines to, say, Salt Lake City."

The other advantage of a regional exchange is the lack of competition for Dorman's sales and repair services. "They try not to load up their membership with too many companies that do the same thing," he said, although "they might have eight or 10 dentists, since everybody needs a dentist."

Exchanges that are purely Internet-based "lose that critical regional component," Whitney said. "If my company is based in Philadelphia, and I need a haircut but the hairdresser is based in St. Louis, it won't do me much good."

Sylvia Tiersten is a La Mesa-based freelance writer.