There is no time of the year when the gap between the advertisement’s fictional life and real life is greater. The commercials create images of peaceful gingerbread-smelling winter wonderlands, where children behave like little angels because they know that Santa Claus’ Big Brother is watching. In the real world, kids are constantly begging for this and that. People get stressed out organising pre-Christmas parties and are frantic about the time-consuming Christmas shopping. Finding the right presents is a challenge. But there is a way out.
Ending the present-buying habit can actually be a relief for most. Not to mention making better economic sense. There is a great deadweight loss – as the economists call it – in Santa’s bag even though Christmas spending does, at first glance, generate GDP growth. This is because the choice of the presents is often badly thought out. Studies have shown that even if the gift is well received, the average recipient’s valuation of it lies at 90% of the buying price. This year the average Finn will spend €295 on presents. The deadweight loss of 10% is almost €30. Multiplying this amount across the country is easy maths. Think about the loss of millions (hours lost to shopping not included) sitting under the Christmas tree when you choose your presents.
Avoiding deadweight is easy. Giving money – yes, dosh, dough, moolah or wonga – will provide a total flexibility for the recipient and prevent deadweight. Another option is to give a gift voucher. The only justification for giving non-cash gifts is when adopting the list services of the type normally used by people getting married. Don’t get carried away by sentimental nonsense, like the celebrated idea of “personal presents”. The system works, whether you like or not.
Some might argue that a happy childhood includes Christmas presents. Others might oppose cash gifts to children while having doubts about kids’ investments choices. There is always the option of saving money in a children’s account, which they can have when they turn 18. This might cause some whining during the holidays but the 18-year-old will appreciate the money more than the Lego pirates or the Hello Kitty junk. Either way, telling the truth about Santa sooner rather than later could actually be a good idea. With this approach, dealing with disappointment is good for the character.
Whichever type of giver you choose to be, keep in mind that giving is more blessed than receiving. Several studies state that those keeping their money for themselves are less happy than the ones sharing it selflessly. The enhanced gift-giving procedure would consist of three steps: a cash gift worth 90% of the value of the intended purchase; the difference of 10% for charity; and the time saved by not shopping used for moments spend with loved ones.
The “It is the thought that counts” argument is just a lame excuse for bad presents. In case you insist on giving non-cash gifts, put the receipt in the package. This way you will at least enable the inevitable refund. (Remember to leave the price tag on.) This way everyone will know who loves whom and how much.