Gift giving 101: When do 'perfect' gifts backfire?

"We predict that in a gift-giving situation, both the gift givers and gift receivers will focus on the gift receivers when thinking about the gift. Givers will choose gifts that are more desirable over gifts that are more practical, whereas receivers will give greater weight to the gift's practicality," write authors Ernest Baskin (Yale University), Cheryl J. Wakslak (University of Southern California), Yaacov Trope (New York University), and Nathan Novemsky (Yale University).

In a series of eight classroom studies and an additional field study involving friends giving gifts to each other, the authors measured the tradeoffs between desirability and practicality in gift giver and gift receiver preferences.

Consider the gift giver who knows the gift receiver loves Italian food, but has to choose between a similarly priced restaurant gift certificate for a well-rated restaurant that is an hour away versus a medium-rated restaurant that is five minutes away.

The authors' research shows that the gift giver leans towards the fancier restaurant while the gift receiver would prefer to receive a gift certificate to the restaurant that is closer to their house. "We show that givers think fancier gifts will cause them to be more liked, will show they care more, and will make their friends happier, but receivers actually think practical gifts will cause this," the authors conclude.

Brands selling products that are often given as gifts can help consumers focus on how they would use a product, even if they are buying the product as a gift for someone else. In doing so, the practicality of the gift becomes apparent to the consumer.