What is Money? Merchant tokens, gift cards, scrip and credits

Previously we at looked government scrip and coin with intrinsic metallic value. Now let’s take a look and private issue money.

Imagine a town or camp in a remote location. A company town engaged in logging, saw milling or mining. On payday the only place the workers can spend money is at the company store so why not just pay them with tokens?

In larger communities it was common for merchants to offer tokens in place of coin for small change. Think about it, what a great way to create customers, distribute money that can only be redeemed at your place of business!

Since everybody in town knows you can get a drink at the saloon with this here “wooden nickel”, or that you can obtain food and necessities at the dry goods store with these tokens, they would circulate through the local economy as a private issue local currency.

Trade Tokens

You can still find examples of tokens in use today. I mean, who hasn’t seen a Chucky Cheese token? Or gotten tokens from the bill changer at the coin operated car wash or amusement park arcade?

As I was discussing this subject with a friend he promptly produced a large brass $5.00 WinCo foods token redeemable on a purchase of $25.00 or more. I offered to buy it from him at a discount but he refused to sell it to me for less than five dollars. As far as he was concerned it was worth every penny of it’s face value.

Other examples of todays merchant money might include gift certificates or gift cards. Starbucks cards were a pretty common item a few years ago and I have to believe the wide distribution of these cards contributed to the rapid growth of its customer base and overall success.

The problem with gift cards however is what happens if the merchant goes out of business? I heard today that Border’s books has filed for bankruptcy. I wonder if they’ll continue honoring their gift cards and for how long? Certainly if you’re still holding a Circuit City gift card it’s worthless now that they are out of business.

If you happen to visit the magic kingdom don’t be surprised to find they have their own scrip. Seriously, what kind of kingdom would it be if it didn’t have its own sovereign money?

Magic Kingdom Money

With the growing popularity of social sites like Facebook and it’s associated virtual reality games we now have a new kind money. If you want to play FarmVille or CityVille regular dollars won’t work. You’ll be needing some “Zynga” money which you can conveniently purchase with your credit card…exchanging physical world credits for virtual reality credits…. as Mr. Spock from the Star Trek series would say “fascinating”.

Virtual Reality Money

Time to go now and get on with my day but I’ll leave you with one final example of alternative money. I need to learn some more about this but in concept I really like the idea of local currencies. What a great way to stimulate local economies by keeping the money within the community. I’m thinking this will need its own separate post.

“BerkShares are a local currency designed for use in the Berkshire region of Massachusetts issued by BerkShares, Inc., a non-profit organization working in collaboration with participating local banks, businesses, and non-profit organizations”.

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This entry was posted in History, Money and Banking, Richard C Gessford and tagged , , , , , , . Bookmark the permalink.

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