Do you have a few presents under the tree already? They all look so appealing and good-intentioned, don’t they? Beneath the wrapping paper and bow, however, each gift has a different story to tell — about behavioral economics, gender dynamics, time management, and power dynamics. They also say a lot about you, the lucky recipient.
WePay makes it easy to collect money online, which means that we’ve seen a bunch of people collecting money for group gifts this holiday season. That got us thinking about the deeper truths behind all this holiday hoopla. The folks here at WePay sifted through a big pile of gift-giving research to find some surprising insights: What value do you think a recipient will place on the item you just bought and wrapped? What’s the value (and the fate) of the gift cards you’re sending to your siblings? Which do you value more: a gift from your parents or a gift from your significant other?
We dug through research from a variety of highly reputable sources – from chin-scratching academic papers out of Northwestern’s Kellogg School of Management to the latest surveys from Consumer Reports, retail trade groups, and even the good people behind National Regifting Day. The data is pretty compelling – and if you’re like me and haven’t even started your shopping – you may want to take a look at the graphic below before you head to the mall.
Let’s start with just basic gift valuation: That $50 sweater you got your house bro, or even your real bro? According to Wharton prof Joel Waldfogel, he’ll lowball its actual value as much as 18%. Because he doesn’t know the sweater market? Doesn’t like you? No – he’ll mentally mark it down simply because it’s a gift. If he were buying it himself, it’d be worth its price, or perhaps even more.
Then there’s the truly depressing economic circle of gift cards. Every year, millions of cards go unredeemed – this holiday season alone, gift givers will throw an estimated $2.5 billion down the toilet on gift-card recipients, who will either forget to use or simply never open them. So think about that the next time you’re in line at Safeway, staring at the gift card rack – with plastic offerings from Target and Apple to Gap and Nordstrom — believing how smart and efficient it would be to cross off five people on your list with the help of a single end-cap. Unused cards with billions of dollars of real economic value have become so rampant that companies like Cardpool are doing well helping people re-sell their unused cards at a discount.
This doesn’t mean you should follow in the footsteps of Ebenezer Scrooge, or rethink the holiday spirit in general. But at a time when many are still burdened by both the macro and micro effects of the economic downturn, it may be time to rethink what it really means to give a gift.
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