‘Account Limits, Fees, Penalties & Bonuses’
LETS is a not-for-profit community exchange system. A single fee of 2.5% on all transactions goes to the Lets Community Account from where it is re-issued in the form of Starter Credits, Pioneer and Bonus Credits to run and promote the network.
Every member has a trading account with an interest-free Credit Facility of ₵250 and a Deposit Limit of ₵250. There is no limit on turnover within these limits, and no account charges. Limits may be extended upon application to the local Accounts Administrator.
All members are encouraged to use their credit facility. It is permitted to run a long-term overdraft as long as there is healthy activity on the account.
In an average year, the ideal LETS trader spends as much as he/she earns. Her account goes ‘through zero’ i.e. from debit to credit, to debit again, many times. Overall her account balance averages zero, i.e. sales are balanced with purchases over time.
* In the early years of a developing the Lets system, the pioneer traders may run longer-term overdrafts without incurring penalties. * The decision whether a trader is attempting to rip-off the network, i.e. is a non bona-fide member, is made by the local and general Account Administrators having first considered all circumstances.
From its Community Account, Cork LETS provides a number of stimulus and incentive bonus payments to members and volunteers. Currently these include:
- ₵12 Starter Credits for all new members.
- ₵12 ‘Pioneer’ Bonus Credits for the first 500 members.
- ₵12 ‘Creative’ Bonus Credits for the first 500 members to use their Credit Facility >₵50.
- ₵3 Photo Bonus for members who include up-to-date photo on their profile.
- ₵6 Buddy Bonus for individuals and clubs who recruit new members.
- Top-Up Grants up to 50% value of gift vouchers fund-raised by club members.
Members can claim their Creative Bonus and Photo Bonus by emailing firstname.lastname@example.org
Penalties & Charges
- Excess Deposits. LETS is a marketplace, not a savings bank. To encourage spending and prevent ‘stagnation’, deposits above the ceiling limit are subject to a ‘parking fee’ called Demurrage @ 3% per month until the deposit comes below the ceiling limit.
- Dormant Deposits. Deposits idle for more than 24 months are subject to 2% per month negative interest charge.
- Accounts in excess of overdraft limits are handled in two stages: 1. Sellers trading with the member see a screen alerting them that the member has exceeded his/her limit; 2. The local Accounts Administrator blocks the trader from making any further purchases. He/she may continue making sales.
- Long term out-of-balance accounts are subject to a review by the Accounts Administration. At worst, the member risks being classified and publically listed as a non bona fide member.
- Non bone fide members. Bona Fide [Latin, in good faith: honest; genuine; sincere; authentic]. Anon bona fide member is deemed by the Lets Administration to have defrauded the network, by means of action or inaction, and who therefore risks being included in the public ‘Warning List’ of traders who bona fide members are advised to avoid.