The problem as Waldfogel sees it is that

The problem as Waldfogel sees it is that, in most circumstances, the dollar you spend Tiffany Key Oval key pendant somebody a gift won't offer them as much satisfaction as they'd get from spending that dollar themselves. If you buy yourself a $50 sweater, you buy it only if it has a value to you of at least $50. The difference between your valuation of the sweater and the price you pay creates a consumer surplus. But say you buy Aunt Jane that same sweater for Christmas. You think it'll look great on her, but it has a turtleneck, and she finds crewneck sweaters more comfortable. Though you spent $50 on the sweater, to Aunt Jane it may have a value of just $25 -which means you've effectively destroyed $25 worth of value. (Let's not even bother with the math on junk like the dancing Santa.) Thus does Waldfogel view Christmas as nothing but "a large and organized institution of value destruction."

And what a lot of value gets destroyed. A 2007 study by DeIoitte & Touche suggested that Americans planned to buy an average of 23 Christmas gifts each, and Waldfogel's conservative estimate of retail Christmas spending in the United States in 2007 was $66 billion. Despite having only 8% of the year's shopping days, December sales accounted for almost one-quarter of jewelry stores' annual receipts, a sixth of annual receipts at department stores, and a seventh at clothing, electronics, sporting goods, hobby, and bookstores.

But, extrapolating from years of studies, Waldfogel pegs the recipients' valuation of those Christmas gifts at somewhere nearer $54 billion-Return to Tiffany Oval tag ring a whopping $12 billion in societal value destruction through one Christmas alone, even before considering factors like opportunity cost, and the roughly 2.8 billion hours Americans spent Christmas shopping. Worldwide, the same December spike appears in most countries for which the OECD collects retail sales data, save Israel, China, and South Korea. Russia, which banned Christmas until the fall of communism, now spends with gusto for the holiday. Even Japan, with effectively no Judeo-Christian heritage, now sees a 21% bump in December retail spending thanks to the creation of a secular Christmas tradition. The result is a worldwide retail Christmas gift bill of more than $145 billion, and a deadweight loss of $25 billion. "Santa is a beloved figure," Waldfogel fumes, "but this is ridiculous."

What to do? Waldfogel makes the case that this kind of spending isn't good from a narrow economic perspective, much less when it's credit-based, as it has come frequently to be. Christmas gift giving isn't going away, however, and though cash makes the most Return to Tiffany Heart tag choker efficient gift, there are some social stigmas around gifting it. As a good alternative, Waldfogel applauds the growing acceptance of the gift card, but sees ways that even it can be made more efficient. Since "about 10% of gift card value is never redeemed by recipients," there's a significant amount of value destroyed through their purchase, as well. His proposal is for stores to start offering gift cards that expire after a period of 12 or 18 months, with the remaining balance given to a charity of the recipient's choice.