Scroogenomics: Your Loved Ones May Not Love Their Christmas Gifts
Author says cash and gift cards are safer bets in $65 billion holiday spend.
Dec. 12. 2009 — -- With just mere days left until Christmas, the mad dash to find the perfect gift is on.
We all know what we'd want for Christmas, but when it comes to shopping for someone else, the process can get a little complicated.
According to the National Retail Federation (NRF), the average shopper plans on spending $507 on gifts this holiday season.
Joel Waldfogel, author of the books "Scroogenomics," said that amounts to billions of dollars in disappointments.
"With $65 billion in annual U.S. holiday spending, 20 percent of that, or $13 billion, is just the missing satisfaction," Waldfogel said. "Others are choosing stuff for us and are choosing it sort of badly."
Waldfogel said that on average, people value items they receive as gifts about 20 percent less than the gift-giver actually spent on them.
"Since I don't know what you like and I don't know what you already have, I might spend $50 and buy you something worth nothing to you," Waldfogel said.
He suggests giving cash or gift cards instead, allowing the recipient to choose what they want for Christmas.
In his book, Waldfogel goes one step farther in suggesting that consumers not buy Christmas gifts at all.
"The choice to buy presents turns out to destroy a lot of value," said Waldfogel.
Waldfogel suggests giving charity gift cards. Instead of spending the gift cards in a store, the recipient can go down a list of charities and decide which one to donate the money on the gift card to.
Waldfogel may be on to something.
The NRF said gift cards were the most requested item this Christmas, with 55 percent of people saying that's what they'd like for the holidays.