Article

Vouchers As Payment

In this article I want to look at a variety of vouchers from gift vouchers, through training vouchers to bartering currencies. Each has benefits.

First however, lets look at the vouchers most people use, Money, in affect promissory notes issued by banks and in more recent times on behalf of governments, by government controlled central banks. It says something on a UK bank note to the effect of 'I promise on demand to pay the sum of .... pounds', the pound was originally a pound of silver, and banks took silver and issued promissory notes to its value. Prior to this you had to move around silver items to use for payments, so bank notes became far easier, and replaced this need. Also paying in silver often meant you had to cut a piece off, while bank notes could be more conveniently in different values. Now as we all know banks don't have a vault full of silver or anything else to back these up, and even government gold, that at one time backed up currencies, has all vanished and we are left with, just the promise, and no collateral. With the drop in confidence and a run on some banks, as we have had recently, governments have jumped in to lend them more, more promises, and extended the promises to depositors. Ultimately if everyone decided they didn't like banks and wanted money, then these promises would be realised by just printing loads of money, tokens. Although some are buying gold bars to put away, most of us are left dealing in and relying on tokens, that are backed by politicians promises. So how reliable are politicians promises. The problem with banks, central or otherwise just generating or creating vast amounts of extra money as they have been doing recently, is that ultimately it will devalue the currency.

Taken from that perspective any other form of token may be as good. Many however are tied to the currency, so if you bought someone a gift voucher for a high street bookshop, it would be in pounds, if pounds buy less then, so will the voucher.

One exception to this is training vouchers they are in their own currency based on an hours training, so if training prices go up all existing vouchers are worth more. Unless you are a training provider you can't cash them into money, so its not an alternative to banks, but training vouchers came about a long time ago to allow businesses to budget their training ahead. They knew the cost of xxx number of training hours and could promise employees training ahead. One reason why many employers like to book training some way ahead is that is encourages valuable staff to stay, rather than moving on. So having training budgets funding vouchers that turn into training both improves the skills of your workforce but also reduces staff turnover and all the costs associated with this. Make the training a reward on achievement and you get more productivity from the best and perhaps the passengers may be encouraged to move on, as you probably wouldn't mind losing a few of these.

Training vouchers out of the business environment also allow you to buy training ahead making a saving, but also as you can get generous volume discounts with training vouchers you can cut the cost of training. As you have just got the vouchers, not booked the courses, you can decide as you gain experience what specific training you require and with some training voucher organisations, which training provider you use.

Training vouchers also make great presents, you know that the person receiving it can only use it for training, and its not like giving money, where most vouchers are.

Gift vouchers from bookshops and the like, were all printed vouchers up to a year or so ago, now some have electronic cards that have a value on. The advantage of these is that you can spend a part of the balance on the card and retain the remaining balance for another day, while with the paper voucher you had to either lose the balance or buy something else to use up the balance.

Another form of vouchers are bartering currencies. These are used in place of real currencies as a way keeping score of work you do and that which others do for you. Some are small local schemes, some have larger turnovers than some credit card companies and run internationally. Most cannot be converted back to cash. The companies that issue them use up the original purchase price of these in part in giving away free units, part in paying commissions and in setting up admin systems. If you are involved in the local small schemes as an individual, rather than a business, the extra income that you generate is tax free. So lets look an example, Fred comes and wallpapers and paints some rooms for you, and you pay him 5 units, plus pay in cash for the materials used, Wendy comes and does some baby sitting for you and you give her 2 units, and you take some wedding photos for Jill and she gives you 20 units plus the material costs in cash.... and on it goes, No VAT, no income tax, ........ all very simple. You can in practice only use them for a part of your life, adding spice and extras, as you still need currency to pay your taxes, property and to fund government projects. For that reason bartering, although a great idea, has limitations at present. There are plans for a new bartering arrangements that gets over most of these limitations, but its not available yet.

Further information

Introduction to Training Vouchers

Training Vouchers & Discount Blocks

Training Vouchers from Training Providers Perspective