There are about 844,000 BerkShares in circulation, worth $759,600 at the fixed exchange rate of 1 BerkShare to 90 U.S. cents, according to program organizers. The paper scrip is available in denominations of one, five, 10, 20 and 50.
In their 10 months of circulation, they’ve become a regular feature of the local economy. Businesses that accept BerkShares treat them interchangeably with dollars: a $1 cup of coffee sells for 1 BerkShare, a 10 percent discount for people paying in BerkShares.
The article quotes a merchant who says the local currency circle isn’t completed because “The circle isn’t quite completed yet in most cases, and someone has to take the hit,” referring to the ten cent difference per dollar.
However, coverage by ABC has a great walk through of the process and points out that other business owners basically see this as a rewards program. The big grocery chains don’t take BerkShares and so the people who use BerkShares will be more likely to shop at the places who take it.
Most “shop local” campaigns focus on putting money back into the local community by injecting it into local businesses. This ten percent take off the top of the dollar actually increases value for the consumer. And, if you pay attention to the fact you have increased patronage and a competitive advantage over others, the business benefits too.
Lewis Solomon, a law professor who studies local currencies, also points out the interesting tidbit that local areas can print our paper money that doesn’t resemble the dollar, but no coins….