When giving gifts, the price is wrong

People are mistaken when they expect that the more they spend on gifts, the more those gifts will be appreciated

It’s enough to give pause to any financially strapped Santa Claus, and perhaps elicit his applause. Don’t worry about cutting back on holiday gift spending during hard times for fear of disappointing others, at least if they’re grown-ups. People appreciate receiving modestly priced gifts as much as they do expensive ones, although gift givers typically don’t realize it, a new study indicates.

For as yet unclear reasons, gift givers are frequently unable to use their own experience as gift receivers to identify especially meaningful gifts for friends and loved ones, says Stanford University professor of organizational behavior Francis Flynn.

“People assume that the more they spend on presents, the more those presents will be appreciated, but we find that that’s not the case,” Flynn says. This result raises the intriguing implication that lavish gifts are often viewed by their recipients as ostentatious gestures rather than generous ones.

Flynn and Stanford graduate student Gabrielle Adams describe their new work in a paper published online November 18 in the Journal of Experimental Social Psychology. This research reflects the broader interest in exploring the extent to which people can shift their perspective during social encounters.

In three different investigations of gift exchanges among adults, the researchers consistently found that givers wrongly assumed that money spent on gifts buys recipients’ appreciation. “I suspect we’d see different results if we studied gift appreciation among children,” Flynn predicts. Kids, more than adults, focus primarily on the nature of a gift rather than its source.

Gift givers reported that relatively expensive purchases best conveyed their thoughtfulness and consideration, the Stanford researchers say. Givers apparently spent more on gifts to impress recipients with the givers’ caring, not their cash, the researchers suggest. Yet recipients preferred gifts that they really needed or that had special personal meaning, regardless of price.

Tina Lowrey, a marketing professor at the University of Texas at San Antonio, calls the new research “an intriguing first step” toward using experimental methods to untangle how gift prices relate to gift appreciation. But as indicated by earlier interview-based studies of people who made real-world gift exchanges, many factors influence how givers and receivers behave and react, Lowrey says.

Experimental studies such as Flynn’s have yet to address issues such as givers’ concerns about how someone other than the recipient reacts to a gift, or the widespread assumption that the effort expended in finding a gift outweighs its price. Givers also often use price as a guideline when selecting gifts for those perceived as “hard to buy for,” Lowrey notes.

Because gifts strengthen and reaffirm relationships, recipients tend to accept those that fall within a broad range of monetary values, says Julie Ruth, a marketing professor at Rutgers University–Camden in N.J. It’s indeed the perceived thought that counts, even if a recipient thinks a giver spent too little or too much money on a present, Ruth holds.

Flynn and Adams first surveyed 33 recently engaged individuals —15 couples and three additional men — who had either bought or received an engagement ring. Participants were recruited from a website where newly engaged couples share their wedding plans with family and friends.

Givers and receivers estimated how much was spent on their engagement rings. To assess appreciation, recipients, all of them women, used a seven-point scale to rate how much they appreciated the ring, how much they felt grateful for it, to what extent they felt thankful for it and how pleased they were to get it. Ring givers, all men, rated the extent to which their fiancées appreciated the rings.

Engaged men expected that their brides-to-be would appreciate rings more as the cost increased. Engaged women cited no more appreciation for expensive rings than for inexpensive rings. Ring prices ranged from several hundred to several thousand dollars.

In a second study, 232 adults completed an online survey in exchange for a $5 gift certificate to an online retailer. Each participant was randomly asked to describe a birthday gift that he or she recently either gave or received. Again, givers and receivers estimated how much each gift cost and completed the appreciation assessment. Gifts ranged from T-shirts and CDs to jewelry and home furnishings costing up to $1,365.

Volunteers also completed a questionnaire that assessed the extent to which they wanted to be seen in a socially desirable way. This measure allowed the researchers to account for the possibility that receivers inflate their reported appreciation, especially for smaller gifts, to present a good image of themselves.

Givers, but not receivers, rated more expensive items as the more appreciated gifts, whether or not givers wanted to be perceived well by others.

In a final study, the researchers chose 197 men and women from an online pool of potential research participants maintained by Flynn’s lab. Participants were randomly assigned to different roles in the hypothetical exchange of either a small gift — a CD picked out by the giver — or a large gift, an iPod.

Givers thought recipients would appreciate the iPod more than the CD. Givers also ranked the iPod as the more thoughtful gift. Yet recipients reported comparable appreciation for both gifts, even after accounting for social desirability.

Flynn suspects that each giver and receiver in these experiments focused primarily on his or her own experience rather than that of an exchange partner. Thus, givers view more expensive gifts as more thoughtful because they know the gift options. Recipients only know that a gift in hand is better than none at all, so they’re relatively less concerned with price, Flynn says.

Also, the prospect of having to return the favor after receiving an obviously expensive gift may diminish the pleasure of receiving that gift, Flynn notes.

Further experimental work needs to study pairs of givers and receivers, with each person rating the extent to which the same gift item is or should be appreciated, Lowrey says.

Bruce Bower has written about the behavioral sciences for Science News since 1984. He writes about psychology, anthropology, archaeology and mental health issues.

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