TEXT OF COMMENTARY
TESS VIGELAND: The thing I’ll never understand about coins is how they can be worth more or less than face value. I mean I know it’s all about history and collection worthiness, but where else would you find something that says “I’m worth five cents” and it’s actually worth $5,000?
Commentator Joel Waldfogel says you could’ve found exactly that under the tree. In the form of a gift.
Joel Waldfogel: With the smell of roasted chestnuts hanging in the air, this year’s $65 billion gift-buying spree is strewn around the tree. Good news for the economy and happy, satisfied friends and family. Or not.
Why doesn’t our collective largesse amount to smiles all around? Turns out, we don’t value the gifts given to us the same as we value things we buy for ourselves. Normally, we only spend $50 on something if it’s worth at least $50 to us. But When we set out to spend $50 on each other, we aren’t sure what to buy. We may buy something worth nothing to the recipient.
For 15 years, I’ve surveyed people about the gifts they give and get versus the stuff they buy themselves. Turns out, that sweater Aunt Thelma paid $50 for? Most people wouldn’t pay more than $30 for it.
But what about the joy of giving you ask? Surely you can’t put a price on that. Although you’d only pay $30 for that $50 sweater, her joy in giving it to you may add another $30 to the gift’s total satisfaction? Then again, if you actually liked the sweater, the gift could have created $50 plus $30… so $80 worth of satisfaction. Of course, it’s also possible that Thelma is a sadist who only enjoys giving you sweaters you do not like, but I doubt it.
I hate to be just a Monday morning quarterback, so here are some ideas for better giving next year. First, keep giving gifts to people you know well and see often, especially kids. Gifts from givers in frequent contact are far less likely to miss the mark than those from givers in only monthly or yearly contact.
Second, when you must give, but don’t know what to buy, gift cards let recipients choose what they want while avoiding the awkwardness of cash. They’d be even better if their unspent balances — about $8 billion dollars per year — went automatically to charity after a few years.
Finally, gifts to charity on behalf of recipients deserve a look. Charity gift cards allow our recipients to choose the one that they feel would make the biggest impact, therefore have the most value. But finally, for this year and next, I wish you happy and efficient holidays.
VIGELAND: Professor Waldfogel is the author of the book, “Scroogenomics.”
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