There’s a lot of good reasons to cut down on holiday gift-giving: it reduces stress, it fights back against the commercialization of this time of year and puts the focus back on family, it’s better for the planet, and according to economist Joel Waldfogel, it’s just darn inefficient! Back in 1993 he wrote a paper titled “The Deadweight Loss of Christmas” wherein he estimates that holiday gift giving “destroys between ten percent and a third of the value of gifts.” In December 2011 he appeared on the NPR podcast Planet Money in the episode “Why Economists Hate Gifts” to again present his thesis.
Waldfogel’s general reasoning makes sense — often a gift is not exactly what a recipient wanted or needed (and sometimes doesn’t get used at all) therefore if they just had the cash the gifter would have spent, they’d be able to realize the full value by purchasing exactly what they want. The difference between what a gift cost and what the recipient values it at is the deadweight loss.
Since it’s boring to tell people exactly what you want and receive that item (unless you’re a kid), and giving each other cash is obviously silly given that it would be a net-neutral transaction between people trying to exchange gifts of equivalent value, Waldfogel’s argument provides a quantitative backing that we’d all be financially better off if we significantly reformed our gifting traditions.
Personally I lean towards minimizing gifting rather than eliminating it altogether. There’s still a nice aspect about giving and receiving something around the holidays that many people enjoy, but it doesn’t have to get out of control.
I think most people would agree that you still want to buy presents for kids, they don’t have much if any disposable income and seem to look forward to gifts the most. Where gifting gets silly in my opinion is when adult extended family members feel obligated to buy each other “something” and everyone just ends up with a trunk full of things which probably won’t get used to cart back home with them.
Anything I really want I just end up buying myself, which I think makes it harder to shop effectively for other adults; even if you know someone has a particular hobby you likely aren’t knowledgeable enough about it to pick out a related item for them that meets all of their needs and isn’t just a worse version of something they already have. I also still live in an apartment so I don’t have room for stuff.
It can be difficult and awkward to be “that person” who singularly announces that they’re not purchasing gifts anymore but then receives several, so the best approach is to try to drive a change in the gifting culture of your family.
We’ve found a good middle ground with agreeing on doing a Secret Santa instead of every adult exchanging gifts. That way everyone gets the fun of receiving one gift, people who like shopping for gifts get to put as much creative energy into it as they like, and everyone gets to save some money and stress during the holiday season. For even a $50 limit you can still assemble an interesting gift these days.
This has enabled me to simplify my holiday shopping to the following people:
- Gifts for one’s significant other.
- Gifts for any kid relatives.
- One gift for another adult via the Secret Santa.
I’m a procrastinator and last-minute shopper, but I’m sure some people have already bought all of their gifts weeks weeks ago, making it impractical for most families to shift course at this point. However the day of a holiday gathering is a great time to bring up trying a more minimal gifting strategy for next year. Prepare to accept the administrative task of setting up a Secret Santa if you’re the one proposing it.
I try to give gifts that I’d want to receive, which usually involves consumable items that won’t permanently take up space, unless I have a pretty good idea of exactly what physical item someone would like. Quality chocolates or candies, fancy soaps, or nice teas are all things I’ve enjoyed getting, then it gets used up eventually and leaves your house.
Honestly one of the best Christmas gifts that I have received in recent memory was a couple pairs of Smartwool socks. I would have never thought that a $20 pair of socks was worth it until wearing those and realizing how comfortable they were. The Darn Tough brand is good too, both them and Smartwool make wool-based socks in Vermont, they come in a variety of weights for activewear (marketed at hikers and to a lesser extent runners and cyclists) or everyday use. I stole that idea and throw a pair of those socks in with gifts occasionally and people love them.
Maybe I’m boringly pragmatic at this point but the “premium version people probably wouldn’t buy for themselves of an object everyone uses” is probably my favorite gift category.
And if I get a gift that misses the mark and can’t be returned, I won’t feel bad about donating it so someone else can hopefully get some use out of it.