I’m sending out a birthday card with a cash gift. It feels strange to give cash. We seem to attach a “tacky” factor to doing so. Leave it to economist Joel Waldfogel to write a book (“Scroogenomics”) on the 20 to 30 percent waste in value that occurs each Christmas season. He argues that cash is actually the best gift we can give someone in most cases.

The gift recipient knows best what they want and giving cash allows them to get the most value for that expenditure. In other words, spending may or may not create value. When I guess what the other person may like, I open the opportunity for destroying the value of the exchange. Unless I now the recipient extremely well or can anticipate their needs perfectly, my gift may have lower value to them than the money spent on the gift. Giving cash allows the recipient to select what they most value as a gift, hence no gift can do better than cash in creating that maximum value. So if we must spend to give gifts, let’s make it most beneficial by giving cash.

I feel better already!