Steadfast Finances
A Personal Finance & Investing 101 blog that delves into current events, consumer education, and techniques to improve your bottom line.
Giving a Gift Someone Actually Likes or Wants Doubles the Value
How many times have you received a Christmas gift and actually said to yourself… what a complete piece of crap!
You smile, remain polite, set your POS gift aside and do 1 of 4 things:
- Regift it.
- Sell it on eBay or Craigslist.
- Throw it in the closet/garage to collect dust for all eternity.
- Donate it to Goodwill.
If you’re a cost conscious person, you begin to think how much this person wasted on your crappy gift just because they didn’t get you what you asked for, or didn’t think enough of you to actually spend 20 seconds of brainpower to think about what you might want, need, or use. Had they bothered to pay attention to your subtle hints, or even listen to you say “I want XYZ“, they wouldn’t have wasted $50 buying you another lame sweater.
If only there were a clever way to help them understand your frustration…
Buying a Gift the Givee Actually Likes Doubles Gift Value!
If I give a gift, I want to get maximum value out of the gift giving process. I never understood the phrase of “giving is more enjoyable than getting” until I actually grew up, but now, I think I get the gist of it. There something strangely addicting to giving a gift where the recipient gives you a bear hug or maybe sheds a tear.
As the consumer education video describes below, if you give a gift that costs $50 but didn’t put that much effort or thought into the gift, and simply bought a generic gift just because you felt obligated to buy them something, you’re actually doing both you and the recipient a terrible disservice.
What you’re doing, in financial lingo, is lowering the joy of giving satisfaction metric (expressed in dollars) that you will receive as the giver, as well as the monetary value that the recipient will place on their gift.
For example:
If I buy my sister another boring sweater for ~$50 that she wasn’t excited to receive.
My joy of giving = $25 (I know she has 10 of them just like it.)
Value she places on her generic gift = $25 (She knows she has 20+ sitting in her closet.)
Total value of satisfaction = $50
So what’s the problem? Only when the 2 metrics are combined do we actually get to the original cost of the item.
(Surely I’m not that bad of a big brother… am I???)
Instead, how about I buy her something she really likes.
How about a quick trip to the day spa for a facial or getting her nails done that costs ~$50.
My joy of giving = $50 (She’s a woman, and I know she adores being pampered!)
Value she places on her day spa visit = $50 (Worth way more than $50!)
Total value of satisfaction = $100
I think this maximum value or maximum “joy of giving” satisfaction metric is a very clever way to re-adjust your consumerism habits if you’re notorious for giving crappy Christmas gifts, a last minute shopper who buys a gifts purely out of obligation, or you need to gently prod that one cheapskate relative that her gourmet fruitcakes aren’t as “gourmet” as she might think.
[RSS Readers please click to site for video]
Hat tip to Professor Joel Waldfogel at Wharton School of Business for devising such a clever gift giving metric.
12 Comments
Dec 6, 20091:07 pm
Of course it would be me! I ain’t no “drive by shooting commenter”!
Will try to hint to the wife about a black floss pick! Although good old fashion Glide is good enough for me!
.-= Financial Samurai´s last blog ..My SUV Will Beat Up Your Hybrid & Save The World! =-.
[Reply]
Dec 7, 20093:58 pm
Now, my husband did buy me a $25 spa gift certificate. He was not aware of the price to pamper (looking at appox. $65 – $100). So in this instance, unfortunately the ‘total value of satisfaction’ is $25 because I have to come up with the remaining funds for my pampered trip. Now, if he was to get me another $25+ spa gift cert to add then the value would be double in the total value of satisfaction.
I’m with Financial Samurai, I would be jazzed with lots of dental floss, too! :)
.-= Money Funk´s last blog ..Menu Plan Monday =-.
[Reply]
Matt SF Reply:
December 7th, 2009 at 4:57 pm
Oh yeah, the day spa thing certainly isn’t cheap! Several years ago, I bought my step mom and sister a half day’s spoiling session with lunch and all that as their Christmas presents. Definitely wasn’t cheap, but they loved it!
[Reply]
Dec 15, 20092:48 am
I find that giving “experiences” are doubly rewarding.. because it’s something the recipients will actually use!
.-= WellHeeled´s last blog ..Pure Altruism – Does it Exist? =-.
[Reply]
Matt SF Reply:
December 15th, 2009 at 11:41 am
Yeah, giving a gift that you know will never end up buried in a closet or crammed away in the garage is good stuff. Maybe I’m growing up, but giving is more important than getting these days.
[Reply]
Jan 8, 20108:27 am
Sometimes the most ridiculous subjects get too much air time and this is clearly one of them.
Why is it that people have so much difficulty with this? The best solution for everyone – give cash. The recipient will appreciate it much more than anything else because he/she can use it for anything they want. How’s that? You give them cash and it is guaranteed to be exactly what they want.
Give cash – no time involved for the giver, no need for the recipient to return/regift/throw away. You’ll be assured no matter what the money is spent on, it is what they recipient wanted.
Sometimes the best answer is the obvious/simplest/common sense one.
[Reply]
Matt SF Reply:
January 8th, 2010 at 8:46 am
“no time involved for the giver”
That’s the problem with giving cash… it’s not money that’s really important, it’s that someone investing their time to find/make a gift that mattered.
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12:35 pm
“Orgy of wealth destruction”! hahaha. Nice.
I love it when people give me gifts I NEED, and less so I want, b/c I feel guilty.
So right now, I need a lot of dental floss. If my wife can buy me like 10 packs of dental floss and spread them around the bathrooms in my house, I’ll be PUMPED! I love flossing my teeth :)
I also need some new Agassi retro tennis shoes. This is something I know she’ll hook me up with for sure.
I WANT the black on black 911 Porsche 911 C2 2006 model, but I would feel guilty if she spent $45,000 on me.
Good thoughts from the video.
.-= Financial Samurai´s last blog ..Why The World Forgives Rich And Famous People For Cheating =-.
[Reply]
Matt SF Reply:
December 6th, 2009 at 12:58 pm
I was curious who would pick up on that quote first… that’s why I didn’t write out that gem myself!
I took the premise video to mean it’s not necessarily about giving what a person needs, but will find max value in their gift. Since gift giving is really an empirical process, it can mean just about anything. That’s probably why I’m on Christmas gift reconnaissance all year long. If someone says they want something, I’m usually taking notes in July and bargain hunting all year long.
Although, not so sure about buying a 100 yards of dental floss, or the 45k Porsche. Maybe a glossy black floss pick with a leather handle would be perfect for ya!
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