Frequently Asked Questions
What is LETS?
LETS is the acronym for ‘Local Exchange & Trading System’, also known as a mutual-credit or group-accounting exchange network.
LETS is a network of people who trade with each other using Credits (₵). No Euros are required, but some traders combine Credits with Euros in payments. Traders contact each other to agree a price and make arrangements.
How does LETS work?
Each participant has a LETS Account and a personal LETS Account Number (CORK####). Participants post their Offers and Wants online. When you buy something, your account is debited (-), while the seller’s account is credited (+) by the same amount. It’s sometimes referred to as “zero-sum accounting”. No money changes hands. LETS “money” is simply an accounting unit in a closed-loop trading network. Our accounting unit is called the LETS Credit.
LETS involves a wide network of participants using “mutual-credit” network accounting. All LETS trading accounts start with zero, they move below zero or above zero and must return periodically towards zero.
Who can benefit from participation in LETS?
Anyone with experience, time or skills, goods (new or second hand) and services (skilled or unskilled) including businesses that have slack time or spare capacity, unsold goods, empty seats, under-used or idle resources.
A healthy society needs a fair means of exchange. LETS allows resources to be traded freely. Traders can find new customers, increase efficiency and conserve their (euro) cash.
Clubs and organisations can convert time and material donations into purchasing power (see under Gift Vouchers).
Is LETS the same as Barter?
Barter is a direct exchange of “this for that” between two traders. LETS is a “multi-reciprocal” barter system using an accounting unit (‘Credits’) to facilitate a complex barter network.
What is a LETS Credit?
The LETS Credit is an accounting unit, a circulating IOU that is backed by the issuer’s offers of goods and services. Credits originate when a LETS trader uses his/her overdraft. Credits are removed from circulation when a trader returns his/her account balance to zero.
What is a Credit worth?
In a world where currencies no longer provide any constant reference value, we’ve given the Credit a ‘base rate’ of 10 minutes of unskilled labour, i.e. a ‘benchmark’ of ₵6 per hour for basic labour.
₵6 per hour is also the rate at which LETS volunteers are rewarded for their services in developing the system, including their skilled and professional services. It is also the rate at which Time Banks reward their volunteers.
To check any price against this base rate, divide it by 6 to give you the cost in basic time/labour. If something costs say ₵24, that’s 4 hours of basic time/labour.
For smaller amounts like ₵2.5, simply multiply by 10 to get the total minutes in basic time/labour. i.e. ₵2.5 X 10 = 25 minutes basic time/labour.
The CES Community Exchange System (our current online facility) has insisted on a Euro-Credit exchange rate, and it equates the Credit with 2 Euro in purchasing power. We emphasise however, that the Credit is non-convertible. It is an independent accounting unit, internal to the LETS Network having no links with the Euro.
LETS does not impose strictures on rates and prices. Instead it uses a base reference value against which prices are measured.
Because the Credit has a basic time value it may be used for internal Time Banking by organisations where the voluntary hour (₵6 per hour) is the standard accounting unit.
Where do the Credits come from?
Every credit is a “promise to repay”. The LETS system allows each participant to create promissory notes, interest-free, and without a private bank acting as intermediary.
The LETS traders themselves create credits when they uses their overdraft facility. A LETS overdraft is interest-free, usury free, with no hidden charges.
A second source of Credits comes indirectly via the LETS Community Account – the general account which receives all transaction fees. The Community account then uses the fees to stimulate and develop the LETS system – i.e. as starter credits, bonus credits, incentives, and as rewards to volunteers for running and maintaining the system.
The LETS Community Account rewards volunteers @ ₵6 per hour for their services in developing the system, including their skilled and professional services. This is also the rate at which local Time Banks reward volunteers.
What can I offer?
Under ‘offers’ you can advertise your skills, goods, and expertise, e.g., spare time, spare capacity, services, tools, space, goods, etc. You can offer labour, advice, training, consultation – amateur or professional – new or second-hand. You can offer one service or several, one item or many.
Offers typically include home-made goods and produce, second-hand goods, skills, skill-sharing, tuition, advice (e.g. on health issues, hobbies, dealing with bureaucracies, etc), personal care, personal development, tool and equipment hire, car-sharing, storage, assistance, help with computers, surplus goods, childcare, gardening, DIY, etc. See the Inspiration List.
How much should I charge?
LETS is an open market place where the laws of supply and demand operate without interference. There are no prescribed rates. Prices for goods and services will fluctuate.
LETS prices are different to euro prices. New traders habitually charge at euro rates but often they don’t get LETS customers, because Credits are so scarce and valuable.
The LETS Network and has no links with the Euro. We adjust our prices to the availability of credits in the system. For now, if you want LETS customers, please keep your Credit prices low.
Is LETS Safe?
The relevant consumer protection laws apply, but remember the old rule – Caveat Emptor – Let the buyer beware. At the end of the day our community network and the power of reputation/recommendation are our best guarantees for quality of service.
It’s possible (and helpful) to leave feedback under ‘Recommendations’ if you are satisfied (or unsatisfied) with your purchase of a particular item or service. See 6. Recommendations under Buyer Actions on your personal Homepage. Why not prompt your customers to leave a Recommendation for you?
Can I hide my contact details?
On Registering, you are requested to provide full contact details, but it’s simple to hide whichever details you don’t want others to see. If you hide all your contact details nobody will be able to contact you!
When you click on the my record button at the top of your Trading Account page you will see checkboxes on the right of your contact details. Tick the details you don’t want to show and then press the [Update Record] button. The selected details will no longer show when others look at your profile.
Can I temporarily hide my Offers or Wants?
You might like to hide/unhide an offering, click on the my record button. Then from your Account Details page click on my offerings this will bring up your personal list of offerings. Simply click on “Hide/Unhide offer” under the list of Actions. This will change the status of the Offering. A hidden offering will not show on the Offerings List or be found through a search.
Is LETS legal?
Since it first began in Canada in 1982, the L.E.T.S. [Local Exchange Trading System] has been accepted and approved by Civil Authorities the world over. The Dept. of Social Welfare has stated that trading in LETS will not impact on benefits.
LETS is called a complementary currency, designed to encourage initiative, to promote resourcefulness, to keep skills alive, to help ‘seed’ ideas find a foothold and grow, to foster a resilient local economy, to support local community groups and organisations.
Is the Credit legal?
As Credits cannot be forced by Law to be accepted in the settlement of a debt they are therefore not “legal tender“.
LetsTrade is not a Credit Institution as defined by the EU [Directive 2000/12/EC(5)] as it does not receive deposits from the public nor does it grant credit from its own account.
Credits are not cashable and it is not possible to purchase Credits from the system.
Neither do Credits constitute electronic money as defined by the EU, as they are not issued in exchange for conventional money, Credits are not “redeemable” and they do not have a par value.
The CES online system we use insists on a Credit-Euro exchange rate. This is beyond our control and is one of the (few) disadvantage of the CES Community Exchange System. Our Credit is a non-convertible unit of account having no links with the Euro.
Are there any fees or charges?
The only charge is the transaction fee – currently at 2.5%.
LETS is a not-for-profit system, featuring zero interest (‘usury-free’) with no hidden charges. New accounts have an interest-free overdraft (currently set at ₵240) which LETS encourages traders to use.
The transaction fee is used by the LETS Community Account to provide starter credit in new accounts, and various incentives and rewards to volunteers to help develop and run the LETS network. Volunteers are rewarded at the standard rate of ₵6 per hour. (All voluntary time is deemed equal, including skilled and professional time.
There is currently no membership fee. LetsTrade occasionally request donations to cover its Euro expenses.
What are Starter Credits and Bonus Credits?
Every new account receives ₵24 Starter Credits upon registration
If you include your photo and a full complement of Offers & Wants, you’ll qualify for an additional ₵6 Bonus Credits)
To “prime” and “kickstart” the system, an additional ₵12 Bonus Credits goes to the first 250 Pioneer Traders) who make a LETS purchase.
To receive your Bonus Credits please email a reminder to [email protected].
What is the Buddy (Introduce a Friend) Bonus?
Every new account holder can indicate the ‘BUDDY’ or existing LETS Trader who introduced them to the system, by giving the Buddy’s Account Number (CORK####) in the ‘Buddy Box’ on the application page. The Buddy receives for every new bona fide trader they introduce, and ₵6 will go to the Admins A/c Ref CORK0003.
How can I include my photo?
To upload a picture of yourself click on the myrecord button. In your personal profile you will see [Upload photo]. Use the [Browse] button to find the image on your computer and when you press the [Update Record] button it will be uploaded to the server. Your picture will now appear on your profile when others look at it. There is more information on the [Help] button. You can claim your ₵4 Photo Bonus by emailing [email protected]and informing them that your photo is online.
What is The CORE Network?
CORE is our Community Resource Exchange Project – aiming to involve a network of Clubs, Associations and Charities to use LETS and to convert their resources into purchasing power.
CORE Accounts enjoy generous terms and receive support with fundraising
Blank Vouchers (in triplicate) are available; these allow organisations to collect donations-in-kind from members and supporters. Completed Vouchers may then be sold for Credits on the LETS website..
Using LETS, a club or organisation can access the resources available in the LETS network.
Our CORE Project will provide your club with brochures, pre-printed vouchers, LETS cheque-books and assistance to get your LETS Fundraise initiative started.
Contact: Michael O’Callaghan on 021-4295370 or 087-9193689 Email [email protected].
Why must I begin by making a purchase?
For a LETS system to function, new (‘pioneer’) traders are encouraged to spend their credits into circulation, i.e. to buy before they sell. There is no pressure to sell. As long as traders bring your account into balance approx every year or so, the system works well. There will be time to make some sales later in the year, or next year
Your account doesn’t need to be in credit before you buy something. LETS operates when people use their overdrafts. So begin today and make some purchases!
How do I make a payment?
When the deal is agreed or completed, the Buyer sends the Seller an “Online Transaction Slip” (Cheque) confirming the amount agreed. The Seller “lodges the cheque” by deducting the amount from the Buyer’s account.
When an agreement between buyer and seller is clear, it’s not necessary/essential for the buyer to give the seller a cheque. The seller can proceed by deducting the amount agreed from the buyer’s account. Seller and buyer will be notified of all transactions by email.
Can I access the site on my mobile?
Access this site on your mobile phone, see what’s on offer, add offerings, enter your trades, search for members, check your statement, check the balances of others, and a lot more!
If you have an Internet enabled mobile phone go to http://cell.ces.org.za and log in just as you would to this site.
How can I participate?
The LETS Comunity Account rewards volunteers in Credits for their efforts in promoting and running the LETS Network.
If you’re interested in becoming a Local Area Co-Ordinator, or in assisting with events, design, promotion, management, policy or administration, please contact [email protected] or call 021-4295370 or 087-9193689.