It’s one week until Christmas, and whether you celebrate it or not, there are probably still a lot of last minute gift givers this holiday season. It’s almost scary to think about all of the crowds at the malls, the parking rage, and all of the Snuggies that are going to be flying off the shelves at a drugstore near you.
I read an article in the Wall Street Journal recently that quoted a study where we value gifts that are given to us at only 80% of it’s value. That means that if you buy me a crappy Snuggie that will eventually get donated to Goodwill for $10 bucks (I have no idea what the going rate is), I would only have paid $8 for it if I had purchased it for myself. That’s a 20% loss in your investment!
If you lost 20% in your retirement fund, you’d be pretty pissed. So why would you do that by giving somebody something they don’t want? And since it’s never going to be used and possibly thrown out, that means it could be a 100% loss. If you had Enron or Worldcom stock, you know what a 100% loss feels like. Pissed!
What Is The Best Last Minute Gift?
So what do you get for someone if you can’t think of a gift that would please them? Cash. Don’t get them a gift with a gift receipt. Don’t get them a gift card at a store hoping they will buy something. Give them cold hard cash. Why? Most people who get an unwanted gift with a gift receipt will either never return the item, will be sorely dissapointed in how much you spent on them, or will attempt to get the cash value for the return.
When I worked in retail as a teenager, I couldn’t count the number of people who said, “That’s it?” when I refunded the money to them. And most stores now have policies in place to only give store credit for the return. Of course this is to keep any potential profits in house, but you’re back at square one and would have been better off with that gift card.
So why don’t you want to give someone a gift card? A few reasons are that they get lost, go unused, and come from stores the receiver never even goes to. The primary reason though, is because gift cards become “free money” in the hands of the owner. People tend to use gifts cards, especially ones with lower values, like discount coupons to purchase items of higher value. That makes sense doesn’t it? No, it doesn’t.
Let’s say I’ve been in the market for a Playstation 3 and I got a gift card for $100 to Amazon.com. Typically, I would shop around and do some searches for the lowest price or wait until a holiday sale to buy it. However, armed with a gift card, I tell myself, “Hey, I only have to put out $150 of my own money to buy it.” So without thought, I buy it because hey…it’s not my money. But it is!
So, don’t give gifts cards. If you happen to be a recipient of one, make sure you treat it like your own cash. Otherwise you’re just throwing away money. And if you’re planning on throwing away money, let me know…I’ll take it!
At this point, I know there are some people who are thinking, “it’s the thought that counts.” You’re probably thinking that if you give cash, the person who receives it will think that you put zero thought into their gift. Wrong. Cash is the most personal gift you can give someone. Change the way you think!
If someone asks you how much money you make, you’re probably inclined to say that it’s personal. Same for how much you bought your house for, how much you bought your car for, and how much debt you have. Starting to get my point? Money is personal. So it can’t get anymore personal than to give cash as a gift.
So make cash the number one last minute gift idea this year. You’ll feel better for not wasting money and the recipient will love it. Guaranteed.
Talk to me, Goose.