Will Patrick wrote some advice on present buying for people and explained why we’re so bad at it:
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.
So what do we do to save money and headaches? Ask them what they want.
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.
I wrote this tweet last year (and retweeted it this week) and it will ring true forever. Just ask your friends and family what they want. Get them to make a wishlist. If they refuse because they’d prefer to carry on the charade, use your judgement and experience and if they complain, don’t buy them gifts anymore. It’s not worth the unnecessary hassle if people refuse to comply. And have a Merry Christmas.
