Putting money on the local economy. Literally.
And from the early response, it sounds as if other entrepreneurs are giving more than just "three cheers" to this new idea.
The currency is called Detroit Cheers, and earlier this year three city business owners each invested $1,500 to kick off the idea, John Linardos from Motor City Brewing Works, Tim Tharp from Foran's Grand Trunk Pub and Jerry Belanger from Park Bar.
Consumers who use the scrip are essentially making a concerted effort to buy local, since only businesses within the city accept it.
In the 1930s such scrip was created by local business owners and entities to help promote economic activity during the Great Depression. As long as businesses accept such currency, this private money is considered legal. The Detroit Cheers currency is being printed on a limited basis but area businesses are willing to invest in an idea that they only hope will grow.
"Right now it's a way for us to help promote our businesses in this down economy," Linardos said.
There are two levels of participation with the Detroit Cheers currency. One is for businesses to accept and recirculate, thereby giving it value. Other businesses can sponsor the printing of Detroit Cheers by financing additional production.
Still in its early stages, the Detroit Cheers is printed only in $3 bills. The value of the currency is backed by putting money aside in escrow that is backed by the U.S. dollar, Linardos said. An additional benefit to local business owners is that while the front of the $3 cheer bill remains the same, the back of the bill can include the logo of any participating Detroit business.
As of late September, Linardos estimated that nearly 30 Detroit businesses accepted the scrip currency. The risk to each business involved is small because only a limited production run has been developed thus far. Some capital costs were required to help with printing and paper costs.
"Ultimately what we'd like to have happen is to find a suitable nonprofit or company take this program over and run with it," Linardos said. "We all have businesses to run and that's our main focus. As part of our research, it's been easy to see that when scrip have been successful (throughout the United States) that was because a strong infrastructure was developed to help run the currency production."
So far, the various Detroit business owners have kept the program alive, and it has organically taken on a life of its own. It remains at the grass-roots level and growth is slow but steady. But additional investment and interest can lead to more features for the Detroit Cheers "bucks."
Detroit Cheers are as valuable as the U.S. dollar to any retailer that accepts it. And as Belanger says, consumers quickly recognize the value.
"It's as good as the U.S. dollar and in our businesses, no better or no worse." he said. "It's a way for us to connect with other businesses for the good of the (business) community.
"Then you can get into more promotions or discounted rates. It's good because we're still able to tweak the by-laws," Linardos said. "But we are hoping a worthy group steps forward that we can hand this off to them. It is a good way to boost small businesses and generate business growth."
Scrip has proven to be successful in other parts of the country. Berkshares are accepted at more than 350 businesses in southern Massachusetts and have been used for about three years. There have been more than two million circulating to date, with five different banks and a total of twelve branch offices now serving as exchange stations.
The city of Ithaca, N.Y. has created its scrip, Ithaca Hours, that involves hundreds of city-wide businesses. Its scrip promotes local economic strength and community reliance that will support economic and social justice, ecology, community participation and human aspirations.
Mike Scott is a freelance writer.
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|Date:||Nov 1, 2009|
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