THE BOTTOM LINE

Stories of residents of small towns returning to swap ‘n’ trade commerce have been fodder for the nightly news since the recession took hold. But in Southern California, barter has long been the commerce of choice for many upscale types.

An estimated 15,000 to 20,000 businesses from San Diego to Bakersfield, including law firms, hotels, contractors and doctors, are involved in barter to the tune of about $20 million a month, says Mark Tracy, president and owner of the American Commerce Exchange in Toluca Lake.

Carl Farless, a North Hollywood dentist, has been bartering at the rate of about $20,000 a year for the past seven years, obtaining among other things, an $18,000 set of Erte limited edition prints and a holiday office party for his staff at Ocean Seafood in Chinatown. “With barter, you don’t feel the searing bite you would feel if you spent cash,” Farless says.

Barter exchanges--about 10 of which are located in Southern California--keep track of who’s swapping what for a 10% to 15% commission on each trade. People offer goods and services for “credits” that can be exchanged for other goods and services. Some exchanges use barter scrip, others use “credit cards.” And when tax time rolls around, barter is considered “wages, tips and other compensation”; the exchanges report all transactions to the IRS.

Beverly Hills rug maker Celia Blum, owner of Celia Inc., has, since 1980, bartered as much as $150,000 a year. “I think of barter as turning my inventory into money, and finding ways to spend it is fun,” Blum says. She’s not alone. According to Stephen Friedland, president of BX International, a Burbank-based company with 52 branches nationwide, one individual recently made a $150,000 down payment on an office building in San Francisco, entirely with barter.