BerkShares are a form of local currency based in Berkshire, Massachusetts. This scheme, which launched in 2006, set out to strengthen the local economy by aiming to foster collaboration among retailers, service providers, and consumers. According to the BerskShares website, federal currency (the Dollar) can be exchanged for BerkShares at nine branch offices of three local banks and spent at 400 locally owned participating businesses.
What methods do they use to achieve their goals?
You can obtain BerkShares by exchanging dollars for them. The exchange rate is 95 cents for 1 BerkShare. They can sometimes be spent at face value – for example, 10 BerkShares can be used for a $10 purchase. This means that you have a chance of saving 5% at places affiliated with the scheme.
For instance, if you went to a participating restaurant and spent 100 BerkShares on a $100 meal, you’ve saved $5. This is because, at this point, you’ve spent 95 dollars (at the bank exchange) for a 100 dollar meal. This is an interesting incentive for consumers as they are actively saving money simply because they are choosing to spend a local currency rather than the federal dollar.
Also, whilst it is a discount for the customer, it doesn’t necessarily mean that the restaurant is giving out a discount itself. The owner can take the 100 BerkShares from the purchase and spend it on another participating vendor or they can take it to the bank and exchange it for $95. Again, this strongly encourages the continuation of spending the BerkShares and keeping it as active as possible. On top of that, the acceptance of this local currency likely leads to greater customer loyalty; the reputation as an organisation which partakes in the improvement and progression of the community can only help the business.
Comparisons with Bristol Pound
Both Bristol Pound and BerkShares clearly have very similar goals of economically improving the community by running a local currency. On top of this, both incentivise the involvement of businesses by promoting the organisations that participate. BerkShares have taken an extra step by having a Business of the Month award. With 110,000 views per year on the BerkShares website, and ads in local newspapers and radio, businesses are definitely inclined to at least consider being a part of the movement.
This can be contrasted with Bristol Pound, which doesn’t have the same kind of financial incentive which encourages the consumers to spend the local currency. People often make their decisions based on how it would benefit them alone, and it seems that BerkShares are catering slightly to that way of thinking.
How successful are they?
As with any local currency, there will always be the inevitable issue of relying on the Federal currency. These local currencies can only reach a certain level of success as they can only be used within a certain region. You can’t use the BerkShares out of Berkshire, so if necessary goods are only supplied from other areas, the US Dollar has to be used. However, the overall aim is to keep money flowing within the community for longer; I’d say that they (and the members of the local community) have been very successful at doing just that.
I’ll end this blog with a quote from the organisation which summarises what they stand for: ‘‘The success of BerkShares is in the hands of the local community – literally’’.