People love getting gifts, and special occasions contribute to the economy. When it comes to gifts, Americans spend:
- $4.77 billion on graduates
- $12.5 billion on Father’s Day
- $109 per wedding
- $861 for end of year holidays
It is natural to want to give something that makes a strong impression. However, there are often hidden costs associated which can make great sounding gifts turn into a burden for the receiver. When you are searching for just the right thing, be careful when it comes to these items:
- Sporting Events – If you are scratching your head about what to get Dad for Father’s Day, you might consider tickets to a sporting event such as a baseball game or tennis tournament. However, parking and concessions can add significantly to the cost. Try to see if a package deal is available or buy a gift card to help reduce those expenses.
- Pets – A pet might sound like a great gift if your spouse is an animal lover. Pets, however, require a substantial financial commitment. Healthcare, pet sitters, and training are some of the expenses. While it may seem thoughtful, you’re really buying a gift that keeps on taking. Many organizations dedicated to animal welfare now discourage giving pets as gifts.
- Gift cards – Speaking of gift cards, it is important to calculate how much someone will actually spend at the location. A $50 gift card might not even cover the cost of a shirt plus tax at some high end stores. Retailers know 72% of customers spend more than the amount of the gift card. No wonder stores have so many gift cards next to the checkout! Gift cards are a great choice when it’s to a store the receiver frequents. When it’s to a specialty store, it may not go as far as you might expect.
- Smartphones – A new phone sounds like a great gift for an event such as Father’s Day or graduation, but there are many costs. Data plans, early termination fees, and even restocking charges are associated with phones. Unless the gift is for your spouse (hence you know you are paying too), it makes sense to just let a person pick the phone that is best for him or her.
- Video game systems – Systems such as the PlayStation 4 cost approximately $400. You then have to consider the cost of individual games. New ones such as Call of Duty: Black Ops III and Lego Jurassic World cost about $60 each. Used games are not always a good deal either. The console becomes a dust collector if the gift receiver cannot afford or loses interest in games. This is another example where the thought is nice, but required a pretty big financial commitment from the person who is getting the gift.
No unpleasant surprises
Gifts show our love and appreciation of others. By thinking about all of the costs associated with a gift upfront, you reduce the likelihood of disappointment later. Remember to always think carefully about what people want.