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Bah Humbug! Why You Shouldn't Buy Presents for the Holidays
Posted Nov 13, 2009 03:03pm EST by Heesun Wee in Investing, Products and Trends, Recession, BankingIt's two weeks until Black Friday, the unofficial start to the holiday shopping season, and already there's heated anticipation about blockbuster deals and big crowds.
But wait. Joel Waldfogel, a Wharton professor and author of "scroogenomics," argues gift giving is not productive for the American economy.
"Through gift giving, it has a chance to miss the mark and not produce that much satisfaction for us," Waldfogel says, explaining that money we spend on ourselves is more economically efficient than money spent on gifts.
If a present or two that misses the mark seems harmless, consider that Americans spend a whopping $65 billion on holiday gifts annually. Research shows 20% of that total -- or $13 billion -- is wasted on useless or unappreciated gifts, Waldfogel notes.
Gift cards: Of course gift cards have gained in popularity. Avoiding the stigma of giving cash, cards account for roughly one-third of all holiday gifts. But not all cards get redeemed, resulting in more value destruction.
Charities: Ever the optimist, Waldfogel encourages consumers buy gift cards for charities -- money you know will be spent and circulated back in the economy. Don't know where to start? He notes sites such as Charity Navigator, that rates charities' effective use of donated dollars, akin to Consumer Reports for the non-profit world.
229 Comments
- Friday November 13, 2009 03:21PM EST
IDONTAGREE says just do a community service for each other see what that adds up to????? get it MR O
- Friday November 13, 2009 03:21PM EST
Think All The Unemployed can afford buying Gifts ????? I DON'T THINK SO / The Stores are going to suffer more than last year
Yahoo! Finance User - Friday November 13, 2009 03:22PM EST
People just want more stuff, it doesn't have to be quality stuff, it just has to be stuff. Americans are the greatest gatherers of crap that can be thrown away. Exhibit A China the biggest producer of cheap disposable crap they pretty much own us now because people are obsessed with collecting more crap.
- Friday November 13, 2009 03:23PM EST
think all the unemployed People can afford gifts / I DON'T THINK SO // the stores are gonna suffer more than last year
- Friday November 13, 2009 03:25PM EST
With all the problems out there why is this topic on the plate?
- Friday November 13, 2009 03:27PM EST
I just ask them what they want and then buy that if they have a suggestion. At least that works in my family but not in my wife's family which we are not allowed to ask because then it would not be a surprise.
- Friday November 13, 2009 03:29PM EST
Simon says "which brings me back to When has a poor man helped anyone." That's about as cynical as it gets, Simon.
- Friday November 13, 2009 03:33PM EST
he has already taken the joy out of the season the cover of this book should have a lump of dark coal on it instead
- Friday November 13, 2009 03:33PM EST
I give small gifts for the kids but the adults i usually just give them money. That way they buy what they want or need,without the hassel of exchanging.
- Friday November 13, 2009 03:34PM EST
The holiday spending will probably be slightly higher than expected but you cannot gauge the market or the general economy by xmas sales.
- Friday November 13, 2009 03:39PM EST
This guy should learn economics!! The money isn't destroyed with a wrong gift, it is just with the shop owner, that's all. What's the problem. And I also give to charity, whale warriors and IFAW.
- Friday November 13, 2009 03:40PM EST
Interesting viewpoint from an economist on gift giving. Excellent video!
Yahoo! Finance User - Friday November 13, 2009 03:40PM EST
still did not get it why is bad for economy.
- Friday November 13, 2009 03:43PM EST
Interesting viewpoint from an economist on gift giving. Excellent video!
Yahoo! Finance User - Friday November 13, 2009 03:45PM EST
Why don’t we just ignore the fact that jobs come from BUSINESS, not the government? And while we’re at it, let’s also ignore the fact that business has been on a crusade to ELIMINATE jobs. I’m becoming impatient with you morons. Why can’t you THINK?
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- Friday November 13, 2009 03:17PM EST
IDONTAGREE says it will be a tough season because of no jobs, its about jobs stupid ,jobs create giving which brings me back to When has a poor man helped anyone