My Guide to Christmas Gift Giving

My grandmom had a good rule for Christmas gifting in her later years: don’t buy me anything I can’t eat, drink, or rub on my body (settle down, this was my grandmom). In other words, consumables. Her house was bursting with crap, so this was a good rule. And it also kept costs under control, because we weren’t going to buy her Dom Perignon or Chanel cosmetics.

I find myself embracing her philosophy a lot nowadays. I don’t want any more stuff for Christmas, because I think I have – literally – every consumer good I want right now. Whenever I want something, I just go out and buy it.

Contrast that with the Rube Goldberg gift-giving machine of trying to communicate what’s wanted, having uncertainty on styles / colors / models / alternatives, finding, buying, gift receipting, wrapping, delivering, unwrapping, returning. And that’s before you consider the whole arms race with the other party – is there a mismatch in spending, or thoughtfulness, or shopping effort, or gift wrapping ability?

It’d be better if we did away with gifts altogether, but I know our natures and the economy couldn’t bear it. So instead, let’s try to minimize the damage.

The best Christmas gifts are:

• Inexpensive
• Don’t take up too much space
• Fungible / re-giftable
• Thoughtful (but not embarrassingly so if they got you a gift card)

You’re not trying to fill a hole in someone’s life, you’re just trying to have something in your hand when you meet them. Keep it simple.

The worst Christmas gifts are:

• Expensive
• Involve style / taste choices
• Are difficult to return
• Compel the recipient (like having to wear or display something)

Don’t try to do too much, and remember that anything that places a major burden on the recipient is value-destroying.

Along with those general rules, there are some categories of gifts that do make more sense.

Gifts that are Consumable

Yep, my grandmom was right, and I’m happy to further narrow the field to cookies and alcohol. Who doesn’t like cookies? And alcohol can be easily re-gifted if needed.

For a personal touch you can go the homemade route – homemade cookies or bathtub gin tells them you really care.

Gifts That Address Imbalances

When gifts help address imbalances across two parties, then they start to make a lot more sense. You can often get to a better outcome than if everyone just selfishly bought for himself.

Economic Imbalances

My youngest son has a net worth of $10.33. If he were to shop for himself this holiday season, it’d be a pretty spartan Christmas. We don’t go nuts, but we certainly make it a more memorable and fun holiday for him than he could on his own.

Knowledge Imbalances

If you know about a really cool product the recipient has never heard of, it may make for a good  gift. That’s becoming increasingly less likely with every product on the planet just a click away, but it’s still a possibility. Just don’t spend too much – what you think is really cool may not be.

Books are a great choice, because it’s easy to find ones that are similar to what a person likes but are unknown to them. Give them a kindle book (you can print out a nice piece of paper to hand over) and it doesn’t even take up any space.

One year I bought my brother a wind-up flashlight to put in his glove box. I had this awesome scenario in my mind, where a regular flashlight’s batteries would have run down but this wind-up one with virtually UNLIMITED power would have helped him change a tire or fight a bear or save the President or something. Upon reflection, that was a kinda lame gift, but he didn’t know those existed, and it was cheap, small, and thoughtful (if misguided). It probably still sits in his glove box, just waiting to save humanity.

Geographic Arbitrage

Another imbalance is when a potential gift giver has better access to something than you do.

My niece in Japan wants something that costs $100 there and $30 here. So much for that whole “world is flat” argument. We’ll ship it to her for $10.

Exhibit B: I don’t have a liquor store near me. My brother does. Combining the best of consumables and geographic arbitrage, I’ve often asked him for a bottle of my favorite booze.

Market Failures

When I used to work for the Man, I had a business casual attire. My shirt of choice was the Brooks Brothers non-iron dress shirt. Actually that’s not true – my shirt of choice was a T-shirt from Wal-Mart, but that didn’t fit within business casual guidelines.

I would never, ever have bought a Brooks Brothers non-iron dress shirt for myself, but the missus started buying them for me. I liked them. A lot. They were great shirts, and I have probably 20 of them in my closet. Was it irrational that I was unwilling to spend our money on these shirts for myself, but I was fine with her spending our money on them for me? Yep, it sure was. But that’s OK – that type of market failure makes for great Christmas gifts.

An Example of the Perfect Gift

For an example of a great gift, my brother several years ago gave me a $25 gift card for Kiva, a microloan non-profit, so I could loan money to a needy person in an emerging market. This was one of the best gifts I’ve received. I had no idea what Kiva was (knowledge imbalance). The gift was virtual, so I didn’t need to store it somewhere. It wasn’t too expensive, so if I hated it no worries. It was fungible, in that I could have cashed it out and kept the money myself (not exactly the Christmas spirit, but an option nonetheless). It even addressed a market failure, because if I had known about Kiva, I probably wouldn’t have bought it for myself.

How fun is a Kiva loan? Actually a lot more fun than you’d think, because I’ve involved my boys in making lending decisions, and the fun continues to this day. When each microloan is paid off, I get to redeploy our capital in a great teachable moment. There’s geography, business, and social lessons to be had. It’s also been entertaining – when my eldest was in Kindergarten and his teacher asked people where they wanted to go on vacation, among the sprinklings of “beach” and “mountain” and “Disneyland” answers was, “I want to go to Tajikistan to see the car wash guy I gave money”. That took a little explaining.

On top of all of that, these loans are actually helping out budding entrepreneurs, which is a little closer to the Christmas spirit than a bow-wrapped Lexus.

Start with Nothing and Try to Stay There

Accepting that the perfect gift is an unattainable goal is the first step for Christmas shopping. The perfect gift is nothing, but where are you going to put the gift tag?

Try not to spend too much money, use some of the guidelines above, and most importantly, remember that no one is going to care a week after Christmas what you got them.

 

Do you have any great gift-giving ideas? What’s the worst or best gift you’ve received?

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