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!
From an economist’s value perspective, there is truth in this concept. From a personal relationship standpoint, it is difficult to accept. Cash forces one to predetermine exactly how much the recipient deserves strictly in financial terms, including the relative economic statuses of the two people involved, any expectations or perceived expectations by either party, etc. One might “get away with” a less expensive gift, if it is carefully chosen; likewise, one might be tempted to spend more than originally intended, if an especially suited item is identified, and the giver recognizes that the extra cost is justified by the added value.
To carry the concept to its conclusion, one could argue that any two people who exchange gifts on occasion should identify the total amount they intend to spend on each other for the year, compare that value to the other’s total, and that any difference between the two be given as the net of all “gifts” between the two for the entire year. Sounds touching, doesn’t it?