The BenkShare one is particularly a crazy example because it's the most popular and it rips people off for 10% of their money when exchanging. From what I gathered you can buy BenkShare money for 0.95 on the dollar and then sell them at 0.95 on the BenkShare so they lose 10%, don't they?
And people still use them because of the added value of promoting a local circulation of wealth.
Basically the way I understand it it's nothing more then merely marked dollars that can't be spend elsewhere and to get them you have to give up 5% of your money and when you want to get rid of them you have to give up 5% of your money again. Nice little side business for the 5 banks that offer them, huh?
LOL it even says so on their website in the slide-show presentation:
"The intent of the program is that more business transactions will take place as a result of BerkShares promotion of local businesses, which can help make up for the discount if you're unable to re-spend all you recieve."
EDIT: never mind, it's fixed correctly, you buy them at 0.95 per BenkShare and sell them at the same rate, so when you buy them you actually get 5% more and they call it a "discount"
