Mike writes ...
Hi Mish,More on Gift Cards
In Japan, even though Christmas gift giving is not customary, we do have a custom called "O-Kaeshi" (Honorable Return).
What "O-Kaeshi" means is that when you receive a gift, then you are obligated to give one back. The Japanese take it to extremes as when a gift is given then another is returned and then another given back for the one that was given back and the cycle continues.
I have put my foot down and told my wife and our friends to "Stop!"
It's really absurd when a Japanese visits a foreign country and then feels obligated to buy some souvenir junk for the folks back at home (I mean, how many Hawaii refrigerator magnets - that are made in China - do we really need?)
When I tell the Japanese that we are to "stop it" (and I can because I have an executive position at work) they seem to always be relieved. Cultural and social pressures are not to be under-estimated.
Anyway thinking that you have to buy presents for the aunt you don't like or cologne for the uncle you don't even really know not only a waste of money, but philosophically inane.
It's Better to buy gold or silver for the immediate family for yourself.
Thanksgiving is a better holiday than Christmas away because, at least, there's no "socially required" gift giving.
Mike
Reader "EM" writes ...
Hello Mish,Mike and EM are both correct.
The one circumstance under which gift cards make sense for both buyer and seller is if the card is offered at a discount to face value.
For example, I have long been using my local coffee ship's gift card in lieu of cash there because I can buy a $100 card for $86. When it runs low, I just add another $100, again at a cost discount of 14%. The store owner gets more of my business than otherwise because I spend more when I feel I'm getting good value, and I enjoy the discount and the convenience of not having to worry about having cash in pocket.
Aside from this usage, though, gift cards are a complete racket.
Cheers,
EM
That said, I will point out there is nothing wrong with gift giving as long four conditions hold.
- Exchanging gifts is genuinely mutual as opposed to a social necessity or obligation
- The act of exchanging is not an emotional chore
- No one is financially burdened
- The gifts are appreciated and generally usable
I wonder what percentage one or more of the above is violated. I also wonder when it will be commonplace to discount gift cards.
Although I seldom see gift card discounting now, I suspect it will not be long before the practice is rampant. Once one major store offers discounts, the others will all follow.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com