Why You Shouldn't Put a Price on a Great Gift

Those expensive gifts you like to give may be sowing the seeds of suspicion
By: 
Alan Morantz
Woman's hands holding gift box decorated confetti on a pink table.

Who doesn’t love to be a rubbernecker to spectacular gift crashes? The cockroach stuffed animal. The 50 pounds of russet potatoes. The colouring book and used crayons for a nineteenth birthday.

Yes, these are all amusing examples of human folly, but wipe that smug smile off your face. While we may know a lousy gift when we receive it, few are adept at predicting what others will appreciate.

Social scientists have looked at this phenomenon from all angles and agree: Gift givers look for gifts that wow and impress. Recipients want gifts that are useful and easy to enjoy. Givers are suckers for “smile-seeking” gifts that elicit immediate reactions (a dozen blooming roses!). Recipients prefer “value-seeking” gifts (two dozen rose buds that can be enjoyed for longer).

Studies show that people appreciate the gifts they requested more than the “thoughtful” gifts they never asked for.

Perhaps the most consequential gap between giver and givee concerns gift price and feelings of appreciation. Gift givers are convinced that the more they spend, the more appreciation they’ll receive. Surely a Rolex shows a lot of love. But that’s not true. Recipients don’t appreciate pricier gifts more than modest gifts. Evidence even suggests that they tend to assume the gift cost less than it did.

This mismatch around gift price is odd, says Aybike Mutluoglu, a PhD student in marketing and consumer behaviour at Smith School of Business. “If you look at it from an economic perspective,” she says, “more expensive gifts represent both an objectively higher investment and greater value to recipients.”

Money changes everything

Mutluoglu is fascinated by gifting behaviour and how it touches disciplines from anthropology and sociology to psychology and economics. It’s certainly a deep well for researchers to draw from. Mutluoglu herself has weighed in with studies that explore why an expensive gift—however well meaning—can be a risky proposition for the giver.

Her research, conducted with Smith colleagues Laurence Ashworth and Nicole Robitaille, suggests that expensive gifts can cause people on the receiving end to become suspicious of the giver’s motives.

“Previous evidence shows that mere reminders of money cause people to be more self-focused and less communal,” says Mutluoglu. “If money causes people to pursue things that benefit themselves, we thought it might also increase the likelihood that people will consider self-serving motives to explain others’ behaviour.”

Mutluoglu, Ashworth and Robitaille tested their theories in a series of studies.

In the first, they wanted to know if an expensive gift alone was enough to trigger suspicion or only when recipients had a reason to be suspicious (when the gift was from a work colleague versus a friend, for example, or when the price tag was left on the gift). They asked one group of undergraduate students to imagine themselves receiving a typically priced gift bottle from the liquor store and another group an expensive bottle from the store. They varied whether the gift came from a colleague or friend and whether the price tag was left on or not. The researchers found that expensive gifts could activate suspicious thoughts even when recipients had no reason to be suspicious.

In a followup study conducted right after Christmas, they replicated the effect with real gifts received by participants from romantic partners, friends and parents.

Experiences beat durable goods

Would recipients also be suspicious if a gift represented an investment of time and effort rather than money? To find out, the researchers asked their panel to imagine either that the gift came from a swanky high-end retailer or from a store that was out of the way for the gift giver to visit. Money, but not effort, triggered suspicion. That was consistent with their idea that money can make people question others’ motives.

The final puzzle concerned material versus experiential gifts. Experiential gifts have already been shown to have a halo effect. Compared to a tangible product, experiences make recipients happier and foster stronger giver-recipient relationships. It’s all about the gooey emotions that experiences bring out. And generally, material purchases are more likely to be seen as motivated by selfishness.

Given these findings, one would think that experiential gifts would be less likely to arouse suspicion than material gifts. To test this theory, a panel was asked to imagine receiving a birthday gift from a friend: either a bottle of wine or a winery tour. As expected, study participants were more suspicious of the gift of the bottle of wine (material) than the tour of a winery (experience).

“We found that experiential gifts could serve as a buffer against the suspicion induced by the gift’s monetary value,” says Mutluoglu. “When a gift is more material, it’s more likely to be viewed as a tangible expression of the expense, thereby increasing the possibility of activating thoughts of self-interest in recipients.”

Relationships gone sour

On one level, expensive gifts do leave a positive impression. This study showed that when people perceived a gift as expensive, they judged it to be objectively better and they appreciated it. But that didn’t stop them from suspecting that the giver’s motives were not genuine.

Such suspicions can also affect relationships. As part of their study, Mutluoglu and her colleagues collected data on recipients’ impressions of the gift giver. They found that, as a result of suspicions surrounding gift expense, recipients felt less close to the giver and thought of them less favourably.

So where does this leave you when a celebration or milestone rolls around that you want to mark in style? For one thing, don’t assume that more expensive is better. Perception of expense differs across individuals, situations, occasions or relationships, says Mutluoglu. Make sure your price tag will not be perceived as “too much” to avoid eliciting suspicion.

If you want to give a big-ticket gift, pick one that doesn’t explicitly convey how much money you spent on it. “Do something to disconnect the gift from the money,” says Mutluoglu. “Certainly, don’t try to convey the expense of the gift, as givers frequently seem to do.”

Better yet, gift an experience. Material gifts may be durable but experiences are as likely—if not more—to leave a lasting impression. (Message to travel or entertainment companies that package experiences: Make it easy for consumers to buy these types of ephemeral gifts. For example, create experiential gift registries.)

Now that we have expensive gifts all cleared up, there’s one last perplexing part of the gifting story: How did we get it so wrong?

We know what it’s like to be on the receiving end of pricey yet ill-considered gifts and have our suspicions aroused. But we seem to have no muscle memory when it comes to buying expensive gifts for others. We make the same mistakes over and over. Retailers aren’t complaining, of course, but perhaps it’s time we break the third wall and consult our inner givee for gift ideas that truly hit home.

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