Experts estimate that we spend 3 to 4 percent of our total annual income on Christmas gifting—but is it money well-spent?
Not according to Joel Waldfogel, author of Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays. Waldfogel claims that most people give gifts that recipients wouldn’t have chosen themselves, leading the recipients to value the gifts at less than the market price. He calls that discrepancy the “deadweight loss of Christmas.”
We also get the gift completely wrong sometimes, according to the research of Karen Pine, co-founder of Do Something Different. She found that:
- 89 percent of women and 79 percent of men pretended to like a gift they hated
- Half of all people have received at least one gift they hated the previous Christmas
- Half of all people have lied to a loved one about a gift, pretending to like it
- 12 percent said they would tell the giver that they disliked a gift
A lot of us decide to opt out of gifting ill-fitting sweaters and silly ties altogether, opting for gift cards instead. In fact, a third of all holiday gift-giving now comes in the form of gift cards. But about 10 percent of all gift card values go to waste each year—and after a period of time, that unused gift card value gets recognized as revenue and goes to the shareholders of the company that owns the store. “I don’t think buyers of the gift cards who meant to transfer some satisfaction to the recipients of the card would be happy to know that,” Waldfogel says. “They’re only transferring 90% of what they’re giving to the recipients on average.”
Not convinced to opt out of gift-giving entirely? Psychology Today lists three “rules” of picking a present to reduce the chances of a gift-giving faux-pas:
1. Appropriateness—in both the value of level of intimacy. That means no diamond-encrusted lingerie for Karen at the office HR department.
2. Empathy—a good gift will have shared meaning, convey a connection in the relationship, and show understanding of need.
3. Effort—good gifts “reveal an aliment of giver’s sacrifice,” showing that the giver thinks the receiver worthy of effort.
All that AND we’re in charge of the fruitcake for the family dinner too?!
Would you give up holiday gift-giving? How do you choose the perfect present?