The cost of giving presents: The Economics of Christmas Gifts

La Navidad es, para bien o para mal, una época de grandes dispendios, ya sea en comida, en decoración o en regalos. Pero, ¿tiene sentido hacer regalos? ¿Son realmente apreciados? Un economista responde.

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Anthropologists call gift-giving a form of ‘social banking’, because of its association with appreciation, strengthening relationships and showing respect. Christmas is a special time of year, especially for children. The idea of unwrapping one of the presents that lies beneath the Christmas tree is a highlight of the festive season. In the UK alone, more than £30 billion will be spent on Christmas gifts this year.

UNWANTED

Christmas is a very expensive time of year, too, with many people feeling obliged to buy presents for family and friends. But do the recipients actually value and appreciate their gifts? Economists suggest that on average presents are valued by those receiving them some 20 per cent less than their actual cost. In Europe, 15 per cent say they are unhappy with Christmas presents they receive, while 51 per cent of Britons and 62 per cent of Americans receive at least one unwanted gift. In the UK, the cost of unwanted presents totals an incredible £5.03 billion. What a what a waste!

DEBT

To make matters worse, many families borrow or get into debt to fund their Christmas spending. In the UK, a survey shows that one third of the population will probably spend more than they think they should have to at Christmas time, while 17 per cent will go into debt to pay for the gifts and festivities. Despite the decrease in spending because of Covid-19, this year Britons will spend an average of £883 each on the festivities. Gifts alone are expected to cost an average of £408 per person.

THE SOLUTION

So what can be done? The solution, say experts, is in only buying presents for people whose tastes and needs you know well. In addition, you can ask for wish lists  of suggested gifts as a buying guide, give cash or gift cards instead of physical presents, buy an experience or shared activity, or donate to charity on behalf of your intended recipient. Oh, and children still adore Christmas presents —so don’t be a total grinch...

ENVIRONMENTAL IMPACT

Every year, the UK uses 365,000 kilometres of festive wrapping paper, with more than five million tonnes ending up in a landfill, to join the 100 million bin bags of waste packaging from Christmas presents. The environmental impact of food waste, packaging, single-use trees, discarded lights, toys and gifts, along with one billion binned Christmas cards, is enormous. Despite this, half of all Christmas shoppers in the UK still say they would buy their ideal gift, regardless of its cost to the environment.

christmas’ Facts and Figures

• Americans are the world’s biggest Christmas spenders, outlaying an average of $992 each on gifts in 2020.

• 22 per cent of Americans will go into debt to pay for Christmas gifts and festivities, compared to 10 per cent in Spain, 9 per cent in Italy and 6 per cent in Germany.

• In the UK, one in ten people buy a Christmas gift they know the recipient will not like.

• 20 per cent of Americans buy a Christmas gift for their pet, while 39 per cent of Britons plan to cook a festive dinner for their dog.

• In the US, 14 per cent plan to buy a Christmas present for a co-worker.

• One third of Britons have “no idea” what they spend on festive presents.

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