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Keep Giving Those Value-Destroying Gifts

Hanukkah began this weekend. Christmas is just 11 days away, followed one day later by Kwanzaa — except for our readers in Canada, who will have Boxing Day instead.

Oh, and today is my birthday. I’m 52. Yes, it is the season for gift-giving, and my personal in-box is open for business. Which is why it caught my eye when Bloomberg recently reported on a speech by a Wharton economist who describes Christmas gifts (and, by extension, all gifts) as “an orgy of value destruction.”

I don’t doubt Joel Waldfogel when he says Christmas alone “vaporizes $25 billion per year,” or that people who receive gifts value them at 20 percent less than the givers actually paid. I just think his calculations are beside the point. Most of us vaporize money all the time, because the money is less important to us than the message we send by spending it.

Suppose, on a quiet Saturday afternoon in Westchester, I finish watching a football game and suggest to my wife that we drive to New York’s Chinatown for dinner. That’s value destruction. I’m going to pay for gas, tolls and Manhattan parking, plus a restaurant meal that I could have just as easily gotten a few miles from our suburban house. Or I could save money by tossing a couple of steaks on the grill.

But I wouldn’t get to say the things I want to say by creating this spontaneous date night in the city. Things like “Thanks for leaving me alone for three hours so I could watch 100 guys I don’t know, playing for two schools I have never seen, beat each other senseless.” Or “Even when I’m screaming in frustration at city traffic, I enjoy spending time with you so much that I’m willing to inflict this experience on both of us.” Or “I’m glad I married you, and I would like you not to feel like an idiot for marrying me.”

Gift-giving works much the same way. Every gift bears a message, even if the message is only “I remembered!”

As I see it, there are three kinds of gifts: The things we would happily get for ourselves if we could afford to, the things we would not get for ourselves but which we enjoy anyway, and the things we would prefer had never come into existence, much less into our possession.

Waldfogel focuses on the last category. He delicately calls this “items that are not well-suited to our tastes.” A hypothetical example: Giving me a membership to the chili-pepper-of-the-month club. I have the culinary sensibilities of a 5-year-old, and I hate anything remotely spicy. So if someone gives me the aforementioned gift, it sends a message that could either be “I have forgotten who you are, but you’re on my list so I have to send something” or “I want to see you writhe in pain.”

These gifts challenge us to show grace, compassion and creativity, as circumstances warrant. If Aunt Millie gives you her hand-knitted version of the crimson Weasley sweater, you thank her profusely and put it on even at risk of asphyxiation to show her how much you appreciate her efforts. If your cousin Lucretia who knows you hate spices sends you that chili-pepper-of-the-month membership, you thank her politely and change the subject, perhaps mentioning that there are new drugs to control passive aggressiveness.

A lot of gifts I receive are in the second category. Amazon’s Kindle device was instantly back-ordered when it was introduced two years ago. Linda and our daughters decided to get me one, and Linda is a magician when it comes to shopping. It would have taken me a long time before I would have gotten around to even considering the Kindle, let alone buying one. But exactly two years ago today I unwrapped the electronic book reader that still accompanies me everywhere I go. I get my Wall Street Journal delivered on the Kindle.

Waldfogel likes gifts in the first category, especially gifts of cash or of gift cards (even though about 10 percent of gift card money is never redeemed). I have nothing against this sort of gift, either. I never have a clue what to get for my sister-in-law for her birthday. I send her an Amazon gift certificate every year and let her pick something for herself.

There also is a lot to be said for gifts to charity. Earlier this year, an organization that planned to give me an award asked my colleague Jonathan Bergman to select a charity to receive a donation in my name. Jonathan chose the University of Montana School of Journalism, where I serve on an advisory council. This was a terrific gift on two fronts: From the Estate Planning Council of New York City for its thoughtfulness, and from Jonathan, who after 15 years knows me well enough to suggest the ideal recipient.

My favorite gifts of all are the ones that cost very little money but which say the most. Since college, my mother has baked my favorite chocolate chip cookies for my birthday every year. I just collected this year’s batch from her. Being an opportunist, I made the same arrangement with Linda after I got married — so now I get two batches of cookies for my birthday, and two more on Father’s Day, too. Being an opportunist and being skinny appear to be incompatible.

My daughters also put time and thought into the things they give me. They will clear a few hours in their schedules to go to a ball game or, a few years ago, to a production of A Prairie Home Companion. Sitting through the radio show was a sacrifice for them, but it meant a lot to me. Since high school, my older daughter has regularly given me home-made music mixes on compact discs, on the surface of which she writes a lovely personal message to her dad. When Waldfogel computed his wasted $25 billion, he should have subtracted a value for how much a gift like that is worth in excess of what the giver paid for it.

To paraphrase Marshall McLuhan, the gifts are but the medium bearing the message. The message is what matters. So don’t worry too much about that vaporized money; keep giving.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book Looking Ahead: Life, Family, Wealth and Business After 55.

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