Monday, June 1, 2009

Tips from an economist: Giving gifts

My wife's birthday is this week. Although I love her deeply and show that love everyday, her birthday forces me to make my love tangible. Every year, on her birthday, I give my wife a gift. Otherwise, I face unspecified, but terrifying consequences. I am compelled to give her gifts three other times per year: Valentine's Day, our anniversary and Christmas.

As an economist, I look at every scenario in terms of opportunity costs. No matter how you slice it, giving a gift will cost you something. You may reap intangible rewards. You may get more out of the gift giving experience than the receiver. Yes, that's all true, but giving a gift is costly -- whether you give a good gift or not. There are three types of costs the giver pays when giving a gift: (1) monetary costs, (2) time costs, and (3) love costs.

Depending on your objective in giving the gift, you may want to spend more on any one of these three categories. Without judging your motivation, this post describes five ideas for solving your gift giving dilemma. After each idea, I give a cost breakdown. Remember, these tips are from an economist, not a relationship expert.

1. Spend a lot of money. When giving a gift that requires spending a lot of money, spending more money can make the date even more incredible. If there is one thing that reality love shows like The Bachelor have taught us, it is that some women can be swept of their feet if only you spend enough money. Here's an example of a date taken directly from an episode of The Bachelor:

First, rent a million dollar diamond necklace for your sweetheart to wear on the date. When you place it on her neck, be sure to tell her the retail value of the diamonds. Next, take a limousine ride to the airport where you meet a chartered jet. Destination: Las Vegas. On the jet, there will be some chilled champagne and strawberries waiting for the two of you. After arriving in Las Vegas, you will find a helicopter waiting. The helicopter will fly over the Strip at sunset, and loop back around to the airport where another limousine awaits. This limo will take you to the fanciest restaurant in town. Lastly, rent a private rooftop condo where you pay for your favorite jazz artist to privately serenade the two of you.

Total monetary cost? More than my life savings
Total time cost? None, aside from the time to enjoy the date yourself. Just hire ABC (or someone else) to do the planning for you. Add their consulting fee to the monetary cost.
Total love cost? None. Most women would love this date as long as the money does not come out of an account you hold together.

2. Give a gift that tells a story. When you give a gift this way, playing to your creative strengths improves the gift. Everyone's love story is different, but every guy should be able to recognize something meaningful in his own love story that he can retell to his sweetheart in the giving of the gift.

Obviously, there are simple ways to give this sort of gift: write a poem and recite it; construct a scrapbook with pictures of your time together; compile a mix tape; take your sweetheart on a date that tours pivotal places in your relationship (i.e., your first kiss, your first movie together, etc.). If you are a macho man, you're about to punch me right now. Aren't you? Fear not. Giving a gift that tells a story does not have to be cliche or sappy. As an example, here's what I did for my wife last Christmas.

I did all of my shopping at Walmart. In particular, I bought everyday things that my wife uses: face cream, cereal, BBQ sauce, etc. I brought the load of groceries back to the house -- 12 items in total, which cost me about $40. My wife was at work, so I had plenty of time to assemble a story around these 12 items. I wrapped each item separately, and it took me all afternoon.

On the outside of each package, I attached a card, numbering the gifts from 1 to 12. If you open each card, there is a teaser sentence about what is inside. For example, on the outside of the face cream, it said "If there is one thing that is clear, it is my love for you. Another thing that will be clear..." On the inside, I attached a piece of paper that said "your complexion." Other sentences were more romantic than that one. That's just the one that I'm willing to share publicly.

In the end, my wife said it was the best gift I have ever given. Take that statement for what you will.

Total monetary cost? None. We needed the items anyway.
Total time cost? One day: a morning of grocery shopping and an afternoon of wrapping/story telling.
Total love cost? None. If you play your cards right, this can be a really great gift. Just put enough effort into the gift that she doesn't think you're cheap.

3. Purchase the old standbys. Don't let anyone put them down. Flowers, perfume and jewlery are great gifts. Just be sure that you don't buy flowers that make her sneeze, perfume that smells bad, or jewlery that she would never wear. In that case, it is a waste of money.

Total monetary cost? I have gotten a bouquet of flowers in a vase for $20, but I have seen bouquets at Jewel-Osco for at little as $6. Perfume is more expensive: about $40 to $100 per bottle. Jewlery is most expensive if you get the good stuff. I have spent $200 on a diamond bracelet. I am sure that others have spent more.
Total time cost? As much as an afternoon shopping, but as little as 10 minutes online.
Total love cost? Ranging from none to moderate. Some women love these things, but many women like their man to put thought into a gift. Purchasing one of the old standbys is low on the thought-o-meter.

4. Buy her a gift card. Gifts send messages about your feelings for your significant other. No gift does this more effectively than a gift card. If you buy your sweetie a 20 dollar gift card to Walmart, you can tell her exactly how you feel. First, she's only worth $20. Second, she's not worth any of your time. Lastly, you think the best place for her to shop is Walmart. If that's the measure of your love for your sweetheart, a Walmart gift card is your best bet.

Total monetary cost? Around $20. More or less depending on the message you want to send.
Total time cost? None. Just pick it up at the check out when you're buying Halo 3.
Total love cost? Likely substantial, but if you can get away with it, more power to you.

5. Buy her something useful. Nothing says love like a frying pan or a vacuum cleaner. On a serious note, if you know your significant other will actually use the gift you're purchasing, it might be a good gift. If she has been pining after the vacuum cleaners in the store, buy her a vacuum cleaner for her birthday. If she has been complaining about how the old frying pan is wearing out, buy her a new frying pan (exactly like the old one). If she has been test driving cars and wondering about getting a new one, buy her a car.

This works for any gift, just so long as she clearly expresses that she wants the gift in advance.

Total monetary cost? None to very large. If it is actually something useful, you would buy it anyway, so the additional cost is zero. If it is just something she fancies (but does not want to buy), you're spending more money than you would otherwise spend. Cars are expensive, so you want to be careful.
Total time cost? Not so much. All you have to do is listen to what she wants and then buy it when she's not looking.
Total love cost? None to very large. Buying a vacuum cleaner can backfire very easily. Remember that gifts always send a message. With this type of gift, you want to convey that you've been listening to her. Under very few circumstances do you want to convey that the you think the carpet is too dirty and that she better do something about it. That's a good way to get kicked out!

Have I missed any good gift ideas? If so, I would appreciate your comments.

1 comment:

  1. hehe. Funny post, Tony! I love your solution for the birthday girl. Your ideas are always so creative in all of these things. Two thumbs up.

    All the nerdy guys Martin works with are always impressed with his gifts. He gets these little gadgets that he can use, so everyone gets excited. They think he's married a nerdy girl. Ha! He sends me a link to a gift that I have no idea what it is. Maybe I am nerdy, but not in the same way.

    Flowers, perfume... just like you say. We think opportunity cost, and it just isn't worth it. Happy Birthday S!
    Katie

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