From gifts that serve as proof of the giver's imagination to virtue-signalling and a spot of 'to you – for me', we've been doing presents wrong this whole time. Here's how to avoid the 'deadweight loss of Christmas'
Science has discovered the rules of Christmas giving – and we break every one of them
By this time tomorrow, all the stress, decision-making and expenditure will finally be over. Well, until it’s time to go Christmas shopping again.
It might be called the festive season, but the gift-buying part is often anything but joyful. And even when it’s over, there’s that odd sense of a job done… but not done well.
There’s a reason for that. Researchers have identified the unwritten rules of gift-giving and it’s clear many of us break every single one. Get to know these rules, however, and not only will you be better at choosing gifts, but it will make the often painful process simpler and potentially far less expensive.
Just how bad we are at gifting has been quantified by Yale University economist Joel Waldfogel, who coined the term “deadweight loss of Christmas” to describe the personal wealth destroyed by buying unwanted gifts each year. According to him, for every dollar spent on gifts, around 30 per cent is actually wasted and with winter holiday gift expenditure in the US alone exceeding half a trillion dollars, that’s a staggering amount of waste. For example, according to advisory company CEB TowerGroup, roughly US$1 billion-worth (Dh3.7b) of gift cards go unspent annually.
So what are we doing wrong? Research by psychologists reveals that we’re just shockingly bad at predicting what the recipient will think of our gift.
There’s an obvious, if unexciting, remedy, though – find out what each person really wants, and give it to them. A 2011 study by Francesca Gino and Francis Flynn of Harvard and Stanford business schools respectively showed that people really are happier receiving gifts they have explicitly requested than they are with surprises.
It may seem cold or unimaginative, but in a classic demonstration of the pitfalls of gift-buying, the researchers found that people actually resented having their explicit request ignored in favour of something else. Why? Because it was seen to be the giver attempting to prove how imaginative they are as more important than meeting the recipient’s request.
So what about showing what a tin ear you have for gift-buying by ignoring the recipient’s request and giving them something linked to a worthy cause. With its promise of being a “gift that gives twice”, charitable donations have become increasingly popular with gift-buyers. These gifts would appear especially suited for those we don’t know very well. After all, who could resent having their name on a certificate showing they were helping a good cause?
According to a study by Professor Lisa Cavanaugh, now at the University of British Columbia, and colleagues, however, this is a bad gift choice. Such gifts are rife with mismatched perceptions. While they might make donors feel good about themselves, recipients can feel they’ve been used as an excuse to indulge in some virtue-signalling. The researchers found that while close friends might be okay with this, more distant friends are very likely to resent it.
Back in the 1970s, researchers thought the perfect gift should aim to make the recipient feel one-of-a-kind, extraordinary and special. But it’s now clear that any definition of the perfect gift must take into account the closeness of the relationship between the giver and receiver, as well as how it might look from the recipient’s perspective, which is far from easy.
There’s one widely-held belief that research does support, however: price alone has no bearing on whether a gift is appreciated or not.
Working with fellow Stanford researcher Gabrielle Adams, Prof Flynn compared the beliefs of those buying an expensive gift with the actual level of appreciation from the recipients. The researchers found that while those giving the gift expected price to correlate with appreciation, there was actually no link at all.
But the most startling proof of the mismatch between perception and reality centres on perhaps the most unimaginative gift of all – cash.
Gino and Flynn found that while people believe this apparently lazy choice will be treated with contempt, it’s typically much appreciated. In fact, more so than a similarly-priced gift on a person’s wish-list.
Quite why isn’t clear. But the lesson is as stark as the title of Gino and Flynn’s paper – when it comes to giving gifts, “Give them what they want”.
The secret to successful gift-buying, it seems, is to keep it simple and stick to wish-lists or explicit requests and badger recipients for specific guidance. And if that fails, then give them money.
If, despite all the evidence, you still think you know what you’re doing and opt to give a surprise gift, then follow the advice of the US National Retail Federation and include the receipt, just in case you’ve somehow failed to hit the spot.
Of course, all this presumes that the gift has been chosen with the best of intentions, but that’s not always the case. A 2016 study by Dr Deborah Cohn of New York Institute of Technology identified gift choices where the giver really doesn’t care what the recipient thinks, or wants to send a message.
These include so-called “to you – for me” gifts, where it’s blatantly clear that the gift is going to benefit the giver at least as much as the recipient, and “aggressive” gifts. Dr Cohn cites a real-life case of the latter as a mother who had a blazing row with her daughter just before Christmas. On the big day, she gave her daughter a gift of a pocket knife, a bar of chocolate and a card saying “Good luck in the wild”.
Here’s hoping for something more congenial from Santa tomorrow. But failing that, at least some cash.