During the festive season, as gift lists are reviewed, considerations arise about whom to gift, how much to spend, and, most importantly, what to buy.

In the UK, households spend an average of £500 on gifts during holidays and New Year period, while American families average $650. While gifting fosters joy, strengthens relationships, and expresses care, an inappropriate gift can backfire.

Elizabeth Dunn, psychology professor and co-author of Happy Money: The Science of Happier Spending, highlights that choosing the wrong gift may harm relationships. Her research shows that receiving an unwanted gift can even diminish expectations for the future of that connection.

To ensure gifts have a positive impact, psychological insights provide guidance for selecting the right ones.

Does Spending More Mean Better Gifts?

Contrary to intuition, studies suggest that expensive gifts aren’t necessarily better received. Research indicates that gift-givers tend to assume pricier presents will be more appreciated, equating cost with perceived value. However, recipients rarely link the price of a gift to its emotional significance.

Jeff Galak, associate professor of marketing at Carnegie Mellon University, notes, "We instinctively think cost correlates with quality, but evidence shows recipients don’t consider price when valuing the thought behind a gift."

While societal norms may dictate a spending baseline, exceeding it doesn’t enhance the gift's impact. Instead, focusing on the gift’s relevance holds more weight.

How to choose the right gift?

Video by William Penn

Consider Long-Term Value

A key to gifting lies in thinking beyond the recipient's immediate reaction. Galak and colleagues Julian Givi and Elanor Williams found that while givers prioritize the moment of exchange, recipients value a gift's long-term usefulness.

For instance, a subscription service might not evoke excitement upon unwrapping but offers lasting enjoyment, making it a well-received gift.

Skip the Quest for Unique Gifts

Galak advises against fixating on uniqueness. Popular items may actually align better with recipients' desires.

Studies show that overly personalizing gifts based on perceived traits can result in overlooking practical needs. Additionally, the tendency to buy varied gifts for different people, even when they might prefer similar items, can lead to less satisfying choices.

When friends admire possessions such as sneakers, it’s wise to gift them the same rather than seeking exclusivity.

Focus on Shared Interests

To select a meaningful gift, identify shared interests with the recipient. Dunn suggests exploring common hobbies or preferences rather than bridging differences.

Shared experiences, such as concert tickets or cooking classes, not only cater to mutual interests but also foster closer bonds. Research supports that experiential gifts strengthen relationships, even without shared participation.

Ask What They Want

If common interests are absent, simply asking what the recipient desires can be the most effective strategy. Studies reveal that people prefer gifts they’ve explicitly requested.

Dunn explains, "While surprises seem thoughtful, the best gifts are often those the recipient has explicitly mentioned."

Although asking might feel less creative, it eliminates uncertainty and ensures satisfaction.

Don’t Overthink It

Ultimately, agonizing over gift selection is unnecessary. Poor gifts are rare, and most recipients appreciate the effort behind the gesture.

Unless a gift is entirely inappropriate, its thoughtfulness often compensates for any mismatch. Research by Nicholas Epley, professor at the University of Chicago Booth School of Business, shows that recipients empathize with the giver’s intentions, appreciating the effort even if the gift misses the mark.

Epley concludes that thoughtful giving not only benefits recipients but also fosters a sense of closeness for the giver. Even when recipients don’t fully resonate with the sentiment, the act of giving enriches the giver’s experience.

In the end, the age-old saying "it’s the thought that counts" holds true, making thoughtful gifting a win-win for both sides.