The other day I got a call from one dear friend who was said that he just received back a gift that he had gifted to another family, which re-gifted and now re-gifted to him.
He was quite unhappy that this had coincidentally occasioned on him not once, but twice. All the time he and his spouse went shopping to get that green sari and now, it is no more in the hands with whom it meant to be. Well, my dear friend thought that one particular community was re-gifting all the time and not the other X-nationality American citizens of the United States. Well, I checked this out.
About 54% of Americans re-gift the things that they do not need. There is an entire cottage industry on re-gifting too, how to re-gift, what not to re-gift and when you should not re-gift and even on re-selling gifted items on e-Bay. A web search turned out over 74,000 sources about re-gifting.
The obvious question of the day then is what do you do with a gift that you do not need?
You definitely have to give it away but it all depends how sensitive re-gifting can get. In some close and caring societies, when old aunt Jenny gives you a gift to place on your mantel she would like to see it in place on her next visit and the one there after and for ever more. Among very close friends, they would also like to see you use the gift. So even at the expense of storing the item, sometimes, you cannot re-gift everything you receive.
Re-gifting of course puts a terrible burden on society in economic terms as re-gifting creates an economic loss to society in the sense that money spends for an item that the recipient does not want. It then re-gifts to another person who may yet not want it and re-gift it to another person who may re-gift it or throw it away. This is how it works: If you gift a friend something worth $10 but if that friend would be willing to pay $6 only for it (that is if they purchased it) then there is a dead-weight loss of $4. However, if that friend does not need the item at all then there is a dead-weight loss of $10. Now multiply all the millions upon millions of gifting during Christmas and we can really have a “Dead-weight loss of a Christmas” phenomenon. Since I worked for international non-profit organizations (UNDP/UNICEF), I must say that dead-weight loss is an important factor in foreign aid and other aspects of economics as well.
The key for all governments and international aid agencies is to minimize the amount of dead-weight loss in its development spending. To put it another way, the cost of aid should not exceed what the recipients would be willing to pay for. If an aid project spends $2 million and aid recipients are theoretically willing to pay only $ 1 million for those services (assumed its actual worth), then $1 million is a dead-weight loss.
While in practice developing countries receive a lot of aid but much of it is overpriced services (expatriate consultants) and imported goods and some of this may have conditional strings to the aid package, especially bilateral aid. A perfect model to minimize dead-weight loss in foreign aid is to give the money to the developing country and ask them to purchase the goods and services. Unfortunately, this model could not work in an imperfect world that is teeming with corruption and misuse of foreign aid funds.
As another example, when the tsunami struck Sri Lanka (also Indonesia's Aceh, India's Tamil Nadu and Thailand) on December 26, 2004 many Sri Lankans in the US purchased goods for shipment to that country comprising of clothing, canned food and even rice. Some of the clothing sent was too warm for a hot country, and especially at that time displaced persons were living under hot tin roofs. Furthermore, the local folks would rather eat a locally cooked meal than have imported canned food. Rice grows locally in Sri Lanka and the rice in the U.S. imports mostly from Asia. Therefore, to send back rice to Sri Lanka was a terrible dead-weight loss in addition to unwanted clothing and the cost of shipment was a dead-weight loss as well. Thus gifting what other people do not want is a dead weight loss as the same resources could have used to purchase goods and services that would utilize for their benefit rather than thrown away as junk.
There are many examples of dead-weight loss that economists outline from customers overpaying for goods in monopolistic economies to government subsiding producers, especially farmers. Taxing workers too much will create some workers to stop working or work less so reducing the extra tax to be collected. On the other hand, creating a tax relief or subsidy to encourage people to buy a service or product would have a dead-weight cost because people who would have bought the product anyway would benefit.
I am invited for a wedding next month. The wedding invitation reads “no boxed gifts please.” Here is a smart bride from Wharton School’s of business MBA program. Indirectly she has asked folks not to give any gifts of items other than “cash”. She has no bridal registry either. With the cash gifts, she and her husband can really buy the things they need and not create any dead-weight loss. I think this is a great strategy for all of society to follow. If there was, discourtesy in re-gifting, recipients could "Return to Sender" and remove all dead-weight loss.The intention was to write something of re-gifting but it was interesting to see how this action has a bearing of dead-weight loss that extends to other aspects of economics as well. Readers interested in the economic aspects of this topic can read Dead-weight loss. I doubt people can stop re-gifting, so here are 12-rules for re-gifting without fear. And let's add a 13th that I heard from my friend Barry at the coffee shop the other day: "Never re-gift with the original name tags." The recipient will definitely know that this was a gift from someone else and may never speak to you for the rest of your life, and this incident really happened to one family down here in Westchester.
can i atleast regift wine without feeling guilty!!
Posted by: rohini de silva | June 29, 2007 at 10:19 AM
Wine is a great re-gift items. Give it a new wrapping if the old wrapping yet exists. Do not re-gift wine if it is cheap. Instead, better pour it down the drain.
Liquor makes a good re-gift because it is always drunk with merriment and laughter. People will love you for it.
Posted by: Merrill | June 29, 2007 at 01:12 PM