Community must find right ‘scrip’ for success
With the recent news of Bentley’s pharmacy going out of business we’re once again hearing the public outcry for supporting local businesses more.
We’ve heard this cry before, but to no avail. We need something new, something that people can really get their heads around and buy into.
The general sentiment of “supporting local business more” is nice but we need something that goes beyond platitudes and delivers results.
I propose something new, or new to us at least.
A while back I read an piece on a community that took an interesting approach. They used a depression-era tactic to solve their modern-era problems with a dying and decaying downtown. This tactic is now being used in about a dozen communities across the country and it’s based on the use of a currency generally known as “scrip.”
Scrip is simply a local currency which, by law, looks different than standard U.S. currency. It is printed and distributed by a local bank. Here’s how it works. You can go into the local bank and buy $100 worth of “scrip” for, say, $90 cash.
The discount rate is 90 percent regardless of what amount of scrip you buy. You can then take that $100 of scrip and use it anywhere downtown.
All the local merchants are on board and accept the scrip. When they receive payment in scrip, of course, it’s still taxable income which they report along with the rest of their income. This isn’t about a tax loophole.
Local merchants accept the 10 percent discount by accepting the scrip. Whenever they want, they can cash in the scrip at the bank.
If the merchant turns in $100 worth of scrip they get $90 worth of cash. Of course, the merchant can also just use the scrip himself to buy locally if he wants to get even more value out of it.
That just creates even more business for the local economy. There’s no obligation to cash the scrip in at the bank.
Since the merchants are the ones who take the discount, in return for the increase in business generated by the scrip, this is a privately-funded enterprise.
This is a way that Ironton’s local merchants could be helped out without the city taking the hit for a big expenditure.
It’s a novel approach but it’s worked before and is working again today in the communities which have revived the scrip system.
Berkshire, Mass., has it’s own currency called the “BerkShare,” Detroit has “Detroit Cheers” and Piedmont, N.C. has the “Plenty.”
I’m sure someone could have fun thinking up a name for a local, Ironton currency.
Now, some communities give a 5 percent discount instead of a 10 percent discount in the distribution of their local scrip. The rate really just depends on what local merchants are willing to accept in return for the inevitable increase in business. The 10 percent discount will clearly bring the bigger increase in business.
It’s been a rough recession and people are looking for ways to save anyway.
Let’s give them a new one. Let’s be on the cutting edge and join the dozen or so communities that are printing their own currency.
I’m sure we have a local bank that would be willing to get on board. We have merchants downtown who need a stimulus like this and we have plenty of people that are looking for ways to save money who will love this program.
All we need, really, is the plan. This article is the beginning of a plan.
As an old coach of mine used to say, “there’s nothing to it but to do it.”
Let’s do this, Ironton.