Community currencies benefit the community as a whole on several levels, both social and economic. They foster a sense of pride of ownership in the community and encourage local cooperation. They protect individuals against inflation, meaning their accumulated wealth can help them realize their own dreams instead of being redistributed to politically-connected corporations. They even benefit community leaders, who benefit from the job-creating and other economic effects of establishing a local currency based upon hard money.
Merchants benefit, too. In addition to the many benefits they share with consumers, there enjoy some unique benefits as merchants from a community currency system.
Community currencies naturally build customer loyalty. Consumers are directed towards merchants that accept the currency and are less likely to make spur-of-the-moment, impulse buys elsewhere. The nature of the transaction also fosters a more personal relationship with the merchant’s personnel. Exchanging goods for coins with a human being is just more personal than swiping a plastic card through a card reader.
Merchants are also protected against the failure risks inherent in paper currencies. If the issuer of a paper currency goes out of business, as the “Recovery Certificates” issuer did in 1930’s Chicago, both consumers and merchants suffer a loss. Merchants naturally have more to lose in this scenario as they typically have more currency on hand. With the issuer out of business, they are left with nothing but worthless paper.
Hard currencies have intrinsic value. Even in the unlikely event that everyone else stops using the currency, the merchant is left with coins made of silver or gold. Failure is much less likely with a hard currency to begin with. Most paper currencies fail due to inflation and the crisis in confidence that accompanies it. Hard currencies today are virtually inflation-proof.
Community currencies can also be designed to create brand awareness. The American Open Currency Standard’s unique system allows each community to design its own tokens, which can still be used with participating merchants anywhere. Individual merchants can even design their own tokens. The marketing possibilities are limitless.
While the system encourages local business, it also gives merchants the opportunity to tap into national networks to sell excess inventory. Any AOCS approved local currency is transferable to and redeemable with any participating merchant. Have a unique product that is only available in your community? Consumers in other communities using AOCS currencies can purchase it from you with their own tokens. Being a participating merchant automatically puts you on their radar screen as a merchant to do business with.
There is no such thing as a zero sum economy. When consumers benefit from community currencies, merchants benefit as well. Merchants are not only consumers themselves but also derive distinct advantages. Find out more about becoming a participating merchant in an AOCS approved community currency at www.opencurrency.com.