Definition of Bartering





What does the term "bartering" mean? What is the definition of the term "bartering"?

Bartering occurs when you pay for a good or service with another good or service. When you barter, you are not paying for a good or service with money.

For instance - let's say that you are interested in buying a dozen eggs from a local farmer. Instead of offering money, you offer the farmer two dozen red apples. This is bartering.

Definition of Bartering - Financial DictionaryBartering occurs regularly in every country throughout the world - some people just enjoy the process of bartering.

In many countries, however, bartering is a necessity.

For instance, if inflation is so high that money literally becomes worthless as you walk down the street, bartering is extremely important.

If taxes are punishingly high, people may choose to barter to stay away from cash transactions that will incur large tax bills.

Or, bartering may occur between two people who have plenty to trade but not much cash to spend. For instance, two farmers who are cash-poor but have plenty to trade may choose to barter.




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