The weird psychology of gift giving

Think of the best gift you’ve ever received. 

If you’re like me, then it might take you some time to come up with an answer1.

What about bad gifts you’ve received? Probably a bit easier to recall.

Return logistics company Optoro estimated that ~$70 billion worth of products was returned (source). And that was back in 2015. Suffice to say, unwanted gifts are the norm.

Studies show that people are more appreciative of gifts they ask for than ones they don’t.

This makes intuitive sense. So why don’t more people do this?

Enter the awkward intricacies of gift giving

If you knew ahead of time that someone wouldn’t like a gift, then would you still give it?

Most normal people would respond “no.” But here’s my guess as to why what people say and what they do diverge:

If I have to ask what you want as a gift, it might be interpreted that I don’t know you well enough to surprise you.

Then, I’d rather feign closeness and assume that I already know. Until our friendship explodes because I got you a fugly sweater.

Givers get something out of giving. (Say that 3x fast).

Givers want the immediate gratification of seeing their eyes light up, and hear ooh, how did you know? 

But going with any information gap when giving gifts means you have to be right twice: to surprise someone and get them the right gift.

Delight is good surprise, like remembering that your friend loves premium free-range beef jerky
Dismay is bad surprise, like getting an expired fruit cake from Aunt Gertrude.

If you ask what someone wants, you’ll dramatically increase the chances of getting someone something they’d want.

Asking my sister what she wants for her bday. Straightforward :)

After all, asking is free.

Getting a gift someone likes, in my opinion, far outweighs the value of surprise.

Gift giving is a weird game of false modesty

People want to appear modest and avoid looking selfish.
There’s something about revealing our preferences that feels self serving—even if it’s just self-judgment.

It may feel like a paradox to Americans, but the Chinese value modesty and have a cultural norm of directly gifting money with red envelopes. This goes to show the indirectness in giving is just a cultural norm that can shift over time.

You get a red envelope! Source

There’s a parallel between gift giving and compliments: one gift is physical, the other is verbal.

People often turn down compliments with modesty. Oh, this old thing? No, I’m not that great…
In Chinese, nali is a common response meaning “Where?” implying the recipient doesn’t deserve the compliment

Sometimes I expand on the compliment and regale the recipient with tales of their greatness. If we find the spot that feels personal and specific to our recipients, they’re more likely to feel touched by the compliment.

I don’t always give compliments, but when I do, I beat them down with amazing ones. *Takes sip of Dos Equis.*

This may apply to physical gifts too. Even with undesirable gifts, recipients are more likely to appreciate the effort if the act of giving the gift increases social connection to the receiver (Zhang, Epley 2012).

You then might find this counterintuitive: studies suggest that sometimes, gifts focused on the giver may be preferred by the recipient. With some conditions:

…recipients are particularly appreciative when they receive gifts that figuratively match the giver… that contain references to the giver’s characteristics, because they perceive such gifts as more congruent with the giver’s identity.

2013 survey from researchers Andong Cheng, Meg Meloy, and Evan Polman

This means that if you’re uncertain about a gift you’re giving, you can buy yourself some social points by giving a gift that feels personal to you, instead of trying to get someone an overly specific gift. I’m a connoisseur of finely aged fruitcakes, the type that looks moldy but that’s just musk. Here you go.

But that only goes so far. Most people overestimate the idea that “it’s the thought that counts,” and still prefer a gift for them, rather than focused on the gift giver.

Although people say ‘it is the thought that counts’ for a gift, thoughts count for very little unless gift receivers were motivated otherwise triggered to consider a gift giver’s thoughts.

Source: Zhang and Epley, Chicago Booth of Business

The big tl;dr : ask what people want, or tell them what you want.

Other unwarranted advice on gift giving

What if I feel uncomfortable asking what someone wants / vice versa?

Firstly, you are insubordinate and churlish. Secondly, you can sidestep awkwardness by asking people if they have a wishlist.

What’s the best gift for someone I don’t know that well, is hard to shop for, or is picky?

I think consumables or gift cards are great options for those struggling to buy gifts.

Consumables like food, coffee, chocolate, alcohol…these are things people can’t get enough of and will use up. People don’t mind having 2 bottles of their favorite wine; people do mind getting a Bluetooth speaker because they already have one, and only need one.

Another great thing about consumables how “premium” you can go but still stay in budget. If a friend likes chocolates, getting her one most expensive chocolate bars around—let’s say $25—that still fits within a gift budget and is a super unique gift to receive.

And what about gift cards? Many people think they’re impersonal, but there’s more to the story.

Is it bad to give gift cards or cash?

Research suggests that the right gift card is better than cash, because…

When individuals receive a gift card, they are more likely to purchase hedonic items (luxury items that are meant to bring pleasure) versus using credit cards or cash for purchases. When individuals are given a gift card instead of cash, they feel a justification to buy something that’s out-of-the-ordinary.

Researchers Chelsea Helion and Thomas Gilovich

If you know your recipient’s guilty pleasures, you can help them splurge with a gift card.

Again, I think this is cultural. I largely prefer receiving red envelopes or direct forms of money, because my preferences aren’t obvious to others.

How do I save money during the holidays?

Other than using cash back programs for purchases, I think Secret Santa and White Elephant are among the smartest inventions in gift giving.

Instead of giving 10 friends 10 separate gifts (and going broke while at it), group exchanges help us not overspend and have fun in a communal setting.

These games also work well because the rules are decided in advance: gift amounts, time, and place.

Now, if you’re too popular and have a ton of friend groups, you can try to forgo it altogether.

Opting out of gift giving

“Are we doing gifts or not this year?”

No one wants to be the Grinch who stole Christmas. But if you don’t care for much for gifts, it’s better to be authentic than feeling pressured to participate. *Glances at the one vegetarian at KBBQ*

Anticipate this and practice the go first principle: announce to your family and friend groups ahead of the holidays that you’re trying to reduce waste and practice minimalism this holiday season.

Suggesting alternatives can help prevent backlash. You can plan an event so everyone could reconnect. Or you can suggest giving to a charity you like or giving to the needy.

Summary of my advice on gift giving:

  • We balance our own egos (wanting to give a good surprise) and utility (a good gift) in gift giving
  • When in doubt, ask the recipient what they want or tell the giver what you want
  • Gift giving is not everyone’s language. Amounts matter less than we think, and experiences (the best gauge for closeness) make for the best gifts


1 There’s the cologne from an ex that lasted years. Or the pair of dress shoes (LINK) created by my friend. But when I really think about it, the best gifts were the ones I’ve already asked for.

I’ve committed almost all the errors of gift giving.

If gifts are a proxy to make personal connections closer, then giving bad gifts will make a relationship seem less desirable. If a gift doesn’t bring you closer, then forgo the gift. You’d be better off writing them a thoughtful card or calling to wish them happy holidays.

To practice what I preach, here’s what I want as a gift: You can best support me by telling people about my blog and sharing my newsletter

Secondly, you can support me by perusing my personal personal tools. If you use/sign up for any of these things, I may get a friend referral bonus.

>>> See all my tools and resources

That’s it! Happy gifting.

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