A LETS—a Local Exchange Trading System—is a membership-based mutual credit system. Trades are made using points and book-keeping rather than money.
LETS build social networks based on reciprocity and informal agreements around the value of each trade. If you want to create new opportunities for the cooperative exchange of goods and services, LETS might be the right tool.
LETS are a membership-based. When members join a LETS, they generally start with a zero balance and an agreed maximum line of credit. When two members agree on a trade, one is credited the agreed amount of LETS points (or credits), and the other is debited the same amount of points. For this reason, a well-run LETS system will have an overall system balance of “zero points” at any one time.
LETS often have multiple means for supporting trades. They may operate out of markets (for example, quarterly members markets), and these may be social events as much as trade opportunities. LETS may have online spaces where people ask for help and offer goods and services. They may have a members directory or newsletters to help connect members to each other.
LETS members are advised to pay taxes as they would for cash sales.