Every year, we buy more bad gifts than we realise and nobody tells us about it. Here's how to avoid the most common pitfalls and use psychology to drastically improve your gift-giving game.
There's a sound of rustling paper. You crack the wrap at the seam. You look inside, unveiling the item within. It's...
Crap. It’s crap. It’s a crap present that you don’t want.
You lift your head and, with a beaming grin, you somehow manage to let out a torrent of thanks and praise for what you have just received. This is wonderful! It's just what I wanted! How did you know? I love it! I'll treasure it forever!
Within a day, it's stuffed in a drawer. Within a week, it's forgotten. Within a month, it's on eBay or off to the charity shop. Worse, it just ends up in a landfill somewhere.
If you had to guess, how many times would you say this has happened to you when you've received gifts at Christmas or on birthdays?
Here comes the even worse part: now think about how many times this might have happened with gifts that you have given to others.
Think you've got a perfect record? Think again, because you really, honestly, probably don't.
In 1993 - to cries of 'Grinch!' - economist Joel Waldfogel published a now-infamous paper (among certain economist circles, anyway) titled 'The Deadweight Loss of Christmas'.
In it, Waldfogel argues that huge sums of money are wasted every year on gifts that nobody really wants. More accurately, he reported that many gift recipients valued their gifts at a dollar amount much lower than was actually paid for the item.
For example, if I bought you a gift for $100 and you thought that it was actually worth about $70 it would mean that, somewhere along the line, you’ve destroyed $30. Pop! It's gone. You might as well have just taken your cash and burnt it.
Waldfogel found that anywhere between 10% and 33% of all Christmas gifts cause this kind of loss every year. This is stunning, especially when we extrapolate out to the entire population.
He concludes by saying that many people could do worse than simply giving cash as a gift because it would carry more value than the actual gifts they might otherwise have bought.
Unless you are absolutely convinced that you are god's gift to... well, gift-giving, then you're probably seeing the same loss of value with your own gifts. Or, to put it another way, a lot of your gifts probably suck whether you realise it or not.
You won't see this, though, because nobody is going to turn around and tell you that your gifts were 'only 70% good'. If anything, the reactions that we get with a good gift and a bad gift are remarkably similar. Nobody wants to make you feel like a bastard at Christmas, even if you did hand out some absolute clangers.
But is it so bad, really, losing a few dollars every year? In short, yes. And then some. But not just because of the money you're wasting.
Outside of bland analysis by economists that ordinary people haven’t heard of, gift-giving helps us maintain and preserve social ties at all of life’s most important occasions; birthdays, Christmas, Valentine's day, anniversaries, graduations... you name it.
In between these occasions there is usually some kind of imbalance between the gifts that we have given to one another. That is, you might knock it out of the park one year and I might give you something that’s nowhere near as good. Next time, I'm going to want to do much better. This imbalance leads, in part, to the continuation of the tradition.
Giving good gifts help to form and strengthen social bonds. It helps us show people how much we care, how much we love them. It helps us say sorry. It helps us convey meaning. It helps us have fun and take delight in generosity. A life without giving and receiving gifts would be a dull life indeed.
On the other hand, giving bad gifts can degrade the quality of those same bonds. At best, it can be annoying to be given a bad gift. At worst, it can drive people apart. If Waldfogel's research is correct, an awful lot of us are unwittingly dropping the ball every year, without really realising it.
Luckily, it's not just economists giving their miserable analysis of the situation; a handful of psychologists have waded in and they're here to tell you that you're just thinking about it all wrong.
There's a surprising amount of research literature out there that all points in a similar direction as to why gifts don't work and what we can do about it. To find a way through this gift-giving minefield, I've gone through some of the most widely-cited papers to get to the bottom of it all. (Citations can be found at the end of this article.)
Gifts don't always hit the spot because the psychology of giving gifts is totally different to the psychology of getting gifts. Although it all happens during the same event, we unwittingly think about these two things in totally different ways.
When people give gifts, they typically want to nail one or more of these four different things:
Gift receivers, though? Their priorities are completely different. They want:
Given the difference between these two lists, is it any wonder that some gifts simply don't hit the mark?
When we give gifts we are mostly thinking about 'the moment' in which we hand it over, seeing the reaction of our recipients. We narcissistically want the chorus of 'oohs' and 'aahs' that come with nailing a really good gift that somebody loves. Whether or not those reactions last any longer than the moment of exchange, though, is not something that gift givers really care about.
Research shows that we make greater errors with gift giving when those gifts are being opened in public - perhaps at a party - than when we give them in private - such as wedding presents.
This is because we end up optimising for the maximum showboat potential of the gifts we give because it feels good to do so well in public. Once the event is over, though, we basically forget about it all. Onto the next thing.
Not so for the gift recipient. After the party is over and everyone's gone home... they've still got the gift. It matters much more to them what comes after the moment of exchange.
This means that it's better to buy a gift that has greater long term appeal than just the momentary 'wow' factor, even if it doesn't feel as good to us in the moment.
Research shows that an 'experience' gift - like a night out at the theatre or a wine tasting course - is often preferred instead of the usual variety of material gifts that get doled out every year.
The only problem is that gift-givers don't really like to give experiences as gifts because the moment of exchange is relatively dull. This is usually because there's some stand-in that gets handed over - a voucher or a certificate - and the response is likely to be bland at best.
The real excitement comes much later when they cash that voucher in. But, of course, the gift-giver can’t actually be there to see that happen. No good.
Gift-givers tend to believe that the more generous or pricey a gift is, the better it must be. This rarely works. For recipients, the absolute quality of the gift matters much more. This is equally true for something that the giver thinks is really thoughtful, too.
This happens when we put an enormous amount of thought and money into a gift for a friend or relative, only to find that they have no interest in it.
A good example of this might be picking up on someone's love for music and then buying them a beautiful acoustic guitar. There's little guarantee that they have any interest in playing an instrument at all, no matter how expensive it is or how much thought you put into it.
If they're not regularly playing that thing a year later, you’ve probably goofed.
If you're genuinely quite distant from the gift recipient, it's almost impossible to get a good gift for them that they will genuinely want. This means one of two things:
Whether or not you should give them cash is another question. If they're your grandchildren this is absolutely fine. If they're your grandparents, perhaps not.
In the latter instance, a good 'consumable' like a decent bottle of wine or a box of chocolates will do. But don't worry about it much more than that.
Sadly, recipients are less grateful about virtuous charitable gifts than we would hope for. While they're good for the cause, they don't score well against the ways in which we normally value gifts. They make the gift giver look good and they feel good in the moment, but they are not valued as much.
Of course, if someone tells you that they would value a charitable gift then go for it. But don't assume that anybody will actually like it as a gift unless you have discussed it in advance.
All hope is not lost. You shall buy gifts that people will actually want! Here's how.
In Waldfogel's 1993 study, there's a chart of gift effectiveness that more or less screams at aunts, uncles and grandparents to simply not bother with material gifts and to give cash instead:
Are you soulmates, together as a couple for many years? You obviously stand a much higher chance of getting the recipient something they will actually want.
If you’re anyone else, you will have a harder time and should maybe not worry so much about making sure your gift is as ‘thoughtful’ as possible and just focus on making their gift useful or buying them an experience.
It seems obvious, but this is often the best way to get people gifts that they actually want. Many avoid this tactic because it diminishes the surprise/wow factor of the moment of exchange, but that's not actually important apart from your own fleeting enjoyment.
What matters more is that you don't waste a bunch of money on something somebody doesn't actually want.
Asking people outright might feel weird at first, and they may not be forthcoming with an answer, but sometimes a bit of wheedling can normally get you most of the way there, or at least the outline of a good idea.
It feels like the opposite of what we should do - common wisdom suggests we need to just guess or otherwise read the mind of the recipient. And some recipients may feel the same way, holding their cards close to their chests. But this generally leads to bad decisions around gifting.
If they don't have an answer for you and you can't buy them something that they directly want, move onto other strategies.
We stand to give much better gifts if we spend more time on making sure the gift is actually useful and usable.
If I buy you a voucher for dinner at a fancy restaurant out of town, it’s pretty inconvenient for you to cash that present in. However, if I bought you a voucher for a cheaper place just a short walk from where you live, it would be far more convenient and easy for you to use. Studies show we would actually prefer the easier, more usable option to the fancy one that’s harder to reach.
Likewise, the curse of the ‘associated gift’ happens all the time. We buy gifts because of their association with something someone has an interest in, but are nowhere near as useful as they would like. You see it in this classic 1998 video of two kids unwrapping a brand new Nintendo 64 console:
The kids - the boy in particular - are wild about it, screaming ‘NINTENDO SIXTY FOOOOOUR!’ at the tops of their voices. As soon as he’s done opening that present, though, he moves on to the next one.
‘NINTENDO SIXTY FOOour… remote controlled car? … Thank you.’
He’s baffled by it. Who wants an N64 car? That’s useless to him. He just wants to play Goldeneye and Mario Kart.
In essence, usefulness (or ‘feasibility’, as the psychologists put it) is one of the most important things to consider in selecting good gifts.
So, whatever you do, make it useful.
One piece of research found that spending time thinking about what the other person would want actually makes us get them worse gifts. Thinking about what they might want is too abstract for us and we make bad decisions as a result.
To remedy this, all we need to do is spend more time thinking about what we would want. This puts us in the mindset of someone who is receiving a gift and helps shortcut the whole ‘different psychology’ thing.
So if you look at what you’re going to give them and think ‘hmm, I’d quite like one of these’ then you’re onto something. Just don’t buy your significant other a bowling ball when you’re the one into bowling, à la Homer Simpson.
This seems like an unusually simple exercise, but one study found that it was a very good way of putting us into the same mindset as the person we would be giving the gift to.
While you're putting together your ideas for gifts, jot down a few ways in which you and that person are similar. Through some mechanism, this then helps us get into the mindset of ‘gift receiver’ and make better decisions as a result.
It’s no guarantee of success, but if you combine it with all the other methods in this article then you stand a much better chance.
If nothing else is working, spend a while thinking about the best gifts that you have received in the last few years. It's a handy way of cutting through all the guff and figuring out what gifts are actually decent. If nothing else, you know it’s a good gift if you can even remember it.
One of the best gifts I ever received was a Kindle, one of the older models with a keyboard. I used it for years until it finally gave up the ghost after about a decade. I couldn't tell you what else I received with it, though.
There’s one thing missing from this whole article: what about gifts that people value more than their absolute cost? This is only usually possible to pull off if you’re very close to the giftee and you’ve got the ability to create something that nobody else could make because you’ve got a particular set of skills.
Maybe you’ve been someone’s closest friend for several years and you can do really good oil paintings. Maybe you've been married for decades and you're a dab hand at woodwork. If you can do something like that, then you should definitely lean into that instead of anything else.
For the rest of us, though, getting good gifts is a case of avoiding a series of blind spots and breaking the habits that we are so used to.
And if all else fails? Just get them a Nintendo 64.
Joel Waldfogel, ‘The Deadweight Loss of Christmas’, The American Economic Review, Dec 1993. PDF.
Jeff Galak, Julian Givi, Eleanor F Williams, ‘Why Certain Gifts Are Great to Give but Not to Get: A Framework for Understanding Errors in Gift Giving’, Current Directions in Psychological Science, 2016, Vol 25.
Ernest Baskin, Cheryl Wakslak, Yaacov Trope, Nathan Novemsky, ‘Why Feasibility Matters More to Gift Receivers than to Givers’, Journal of Consumer Research, 2014. PDF.
Mayet, C and Pine, KJ, ‘The Psychology of Gift Exchange’, an internal report at the University of Hertfordshire, 2010.
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