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Is the Pittsboro Plenty really a good idea?

By DJ Kelly
Posted Thursday, May 14, 2009

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Pittsboro, NC - My initial take on the Plenty was that I didn't see the point but if someone wants to use it go ahead.

I hate to be negative about anyone promoting local business but the more I read about it, the more I wonder if it really is a good idea.

The premise of the Plenty is that it encourages money to recirculate within the community and promotes local businesses. The first obvious question is how? Since they're only accepted by local businesses anyone who has Plentys has to spend them locally or exchange them at the bank.

But how do people get Plentys in the first place? Very few people will be getting Plentys as wages so most people will be getting them from the bank. This means they've already made the decision to spend their money locally so how did the Plenty really help? They are apparently getting a discount since they can exchange $9 for 10 Plentys so maybe that will encourage some people to use them but getting a discount won't help if there aren't local stores that already have what you need.

This section from the Plenty FAQ about the old Plenty describes the major flaw in the Plenty program:

"The original PLENTY, while started with the best intentions, suffered from “circulatory failure” when the majority of these newly created PLENTYs ended up at the store that best met the needs of local customers — the co-op grocery. Clearly, everyone needs food, and when new PLENTY members received their “free money” the first place they went was the grocery store. Unfortunately, the grocery had too many suppliers who didn’t accept PLENTYs, and they were unable to exchange their pile of PLENTYs back into Federal Reserve Notes to pay their expenses. Thus, they were unable to accept more PLENTYs, and the circulation was largely snuffed out. When the local grocer could no longer accept the local currency, broader acceptance suffered as well."

Without a significant number of Plentys entering the system through wages and limited business to business opportunities for them to circulate most Plentys will be purchased from the bank, used in local businesses which will then end up converting the majority of them back into real currency to pay expenses. The old Plenty failed when the major business that accepted them, the co-op grocery got stuck with a significant amount of capital tied up in a worthless currency. The new Plenty "solves" this problem by allowing for conversion between Plentys and dollars but Plentys still won't be truly circulating in the community.

Local businesses succeed by providing great service, merchandise, value, convenience, etc. A local currency doesn't change that. If the businesses are providing all those things people can just as easily spend regular US dollars and skip the bank step. A good support local businesses marketing campaign would be just as effective without all the overhead and hassle of the Plenty.

One other thing. Remember that discount you get when you buy your Plentys? Anytime you get a discount remember that the business owner takes a cut. Everytime that business owner has to convert Plentys back into dollars they lose 10%. Depending on what percentage of their revenue is in Plentys this could be a minor or a major expense. Hopefully the Plenty will have encouraged additional customers to make up for that deficit otherwise they'll have to raise prices to everyone to compensate. The bottom line is still the bottom line.

Also, is the new Plenty a "bailout" of the people that got stuck with the old Plenty?

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Is the Pittsboro Plenty really a good idea?