During freshman year of high school, I discovered that my new group of friends had an entirely different methodology for gift giving. When it was someone’s birthday, we would meet up (probably for a movie), and instead of buying a gift, wrapping it, and writing a card to go with it, everyone would just give the birthday person a $20 bill and wish them a happy birthday. It was so simple and so ingenious, I thought! I no longer had to worry about whether or not someone would like my gift, or whether or not they would judge my crappy present-wrapping skills.
And from an economic standpoint, gifting cash makes perfect sense. People know their own preferences best, and they want to make their friends and loved ones happy through the gifts they give. Purchasing gifts for loved ones sure sounds like a losing proposition since we simply don’t have enough knowledge about our recipients’ true preferences in order to give them a gift that they want and will like. If given the monetary equivalent of the item in question rather than the item itself, they can either spend the cash on the item that we would have bought them, or if there is something else that they desire more greatly of the same cost, they could have bought that instead and derived more utility out of it. Economist Joel Waldfogel refers to this as the “deadweight loss” of Christmas, where there is a gap between how much we spend on a gift and how much it’s actually worth to the recipient.
So what gives? Why do we still feel queasy about sending someone cash as a present? My immediate reaction is that it feels completely impersonal; maybe we’re missing out on the sentimental value of a gift and focusing too much on the economic value. The economist Ezra Klein describes this phenomenon by referencing a grey rock on a coffee table that says “God Bless You” on it. The rock is not particularly valuable in and of itself to him, but when placed in the context that it was given to him by his mother, its value is incalculable.
The sentimental value of a gift can’t be the only missing component though. If my best friend buys me a box of chocolate-covered almonds, it’s surely sentimental because she gave it to me. However, I’d be a little disappointed because I’ve mentioned to her how I’m allergic to nuts, and it feels a little thoughtless to overlook something like that. Instead, I find that I like it when someone both thinks of me and remembers my preferences; the gifts that have stood out are ones where someone has somehow demonstrated that they care enough to listen and pay attention to details🙂 I remember a card my friend Christine gave me for my 21st birthday: I had mentioned offhandedly to her that I liked it when we were browsing Urban Outfitters together a few months prior, and it means the world to me that she expressed that she cared by keeping that card in mind.
Gifting should also be expressive of our relationships, and how we’ve grown closer and grown up together over time. We’re able to give better gifts to others as we get to know them better because we’ve shared and developed our identities with one another over time. We’re able to engage and connect with them on a deeper, more intimate level. I mention this because I’m reminded of a set of scrapbooks my friend Audrey put together to celebrate the last four years of college together: the messages are more thoughtful than if we had merely spent a year together because we’ve been able to learn more about one another and share more experiences together.
These are what gives. Gifting isn’t a rational social phenomenon. Adding sentimental value, affirming one’s care about someone by listening to them, and symbolizing the strength of a relationship between two people should take precedence over the pure dollar value or utility derived of the gift.
Finally, the question inevitably comes up of how we can give good gifts. I don’t have a good answer to that; like many other people, I don’t believe in my creative juices enough to execute on this well. That being said, one guiding piece of inspiration has helped me out a bit: this incredible piece by Ben Kuhn.
Thanks to Audrey, Lauren, and Rachel for spearheading the thoughtful gift-giving process. Thanks to Audrey for looking over a draft of this.