Read our take on the book Scroogenomics by Joel Waldfogel
By Rob Watts, Wishzilla Co-Founder
Last week Chris (my fellow co-founder of Wishzilla, and the originator of the Gift Box Server) forwarded me a review by Orson Scott Card of the book Scroogenomics by Joel Waldfogel. Chris was completely baffled by the review, and kept saying how he just didn't understand it. "This just shows that everyone needs to use Wishzilla," he said.
So I picked up a copy of the book (or at least downloaded the Kindle version on my iPhone). While reading it, I realized that Chris would be confused by the whole Scroogenomics concept, because he and his family have been using the Wishzilla system for fourteen years. They've forgotten what it's like to get lousy gifts! I remember, and I have to tell you Wishzilla does no less than completely revolutionize gift giving. And Scroogenomics proves why.
Let me explain.
Woldfogel claims that a massive amount of value is lost when we as a society collectively buy unwanted gifts. According to his research, people value gifts from others at about 85% of the value paid, meaning that 15% of the value simply evaporates into thin air. You see, normally when you pay for something you value it more than the cash you pay for it; you wouldn't part with the money otherwise.
That means that, on average, if you spend $1000 shopping for gifts for your family over the holidays, it's like burning $150 of it. So from a purely economic standpoint, it's better to just give away the cash.
"Worldwide, " Waldfogel writes, "we're spending a few hundred billion dollars per year on the holidays. in the process, we're destroying $25 billion annually."
In other words, sign up your friends and family on Wishzilla and together we can put that $25 billion to better use!
I highly recommend picking up a copy of Scroogenomics (Amazon.com: $9.95). In the mean time, here are a few more thoughts to ponder.
Waldfogel's analysis does not account for sentimental value, which is something of an intangible. I think trying to value sentiment in dollar figures is pointless anyway. If you are just giving away sentiment there is certainly no need to pay a lot of money for something. And I don't think your Aunt May gave you that hideous sweater because she expected you to like it for sentimental reasons. She actually thought you would like to wear it, even though the only reason you keep it is so you have it just in case she happens to ask.
So if you calculate the economic value of receiving a gift you actually wanted (which you value more than the price tag, just like something you would buy), and then tack on the added sentimental value of receiving that perfect gift from the perfect giver, you have a winning proposition. You are creating value rather than destroying it, which makes economists very happy.
So you decide to use a wish list or registry like Wishzilla because you are sick of struggling to find decent gifts, and really hate cluttering up your house with unwanted brick-a-brack. Woldfogel actually suggests using registries to help maintain the value of gifts.
"If surprising your recipient is not absolutely necessary," Waldfogel writes, "then there are some easy solutions, such as gift registries or wish lists."
This is indeed the case with the vast majority of registries out there. First of all, you know what's on your list, and secondly you know what has been purchased by just looking at the list. You may not know who purchased it, but you know of a certainty that it has been purchased just by looking at your registry.
This is why here at Wishzilla we work so hard to maintain the surprise. With every new feature we add, keeping gifts a surprise is always paramount, a requirement that often adds layers of complexity to an otherwise simple piece of functionality.
So, Professor Joel, we would like to respectfully disagree that using a wish list ruins the surprise. You just aren't using the right wish list.
Gift giving is a nuanced art. It's not always easy to anticipate what someone wants and needs, yet the pleasure of giving a beautiful gift, and receiving something truly memorable from a treasured friend or loved one is undeniable. But gifting is comprised of both the giver and the givee, and fostering good communication between the two parties is essential to a meaningful exchange.
In ideal relationships, we would know each other so well that there would be no need to communicate specific desires. In reality, families are spread far and wide, kids leave for college, trends in fashion and technology advance much too quickly to keep track of, and life is full of complications that make good gift giving decisions extraordinarily difficult.
That's why Wishzilla goes out of its way to provide easy means of gauging the needs of your friends and family. Our long-time users will tell you that a wishlist often just provides a springboard for ideas about the right gift. They make sure that their profile is populated with their sizes and color preferences, and add a variety of items to their wishlist to fit every budget.
Some users have told us that the best thing about Wishzilla is that it provides a snapshot of someone's life at a particular moment. It gets the creative juices flowing, so to speak, and makes it much easier to choose an appropriate gift. It might be the exact wish, an upgraded version of it, or something not on the list but of the right size to fit.
Let's talk about teenagers for a second. If you think you know what your teen wants, just wait five minutes. It's bound to change. And there's the problem that you might know what they want, but it just might not be appropriate or necessary to indulge them. But knowing what they want is a great starting point, and helps avoid the seemingly inevitable gifting faux pas. "Oh, thank you! I've always wanted one of these," to the family, accompanied by an acerbic smile, and, "I already have like three of these, and besides, it's so yesterday morning," to the friends.
Communicating what you want and need is critical. But communicating what you got for someone? That's where gift registries get it wrong. The system shouldn't give away the fact that someone, anyone, will be giving you a particular gift.
Most of the fun of gift giving is striking the right balance between finding out what someone wants and keeping the fact that you know what they want a secret. At Wishzilla, we understand that balance.
You went out of your way to make sure that your mom has absolutely no clue that you actually got her that fabulous day spa trip she's wishing for. We won't tell if you don't.
Times are tough, and we're all having to tighten our belts and make some hard decisions when it comes to our purchases. But chances are if you are reading this, you're better off than more than 99% of the world's population. In Scroogenomics, Joel Waldfogel suggests giving charity gift cards, and outlines a lot of other great ideas to deal with the roughly 10% of the value of regular gift cards that is never redeemed.
But the fact remains that gift cards are almost as wasteful as unwanted gifts. If 10% is wasted anyway, that's not much different than wasting 15% of value on unwanted gifts. It's better to just make sure you're getting what people want.
Frankly, I think gift cards are almost as much of a cop-out as cash. You still have to take the time and resources to go back out there and go shopping with the gift card (okay, I know some people love shopping, so maybe it's not so bad).
But I think Waldfogel is on to something with the charity gift cards, so I propose to go to the next logical step.
If you really have everything you need, consider making a wish of a charitable donation. The next time you're listening to the fund drive on your local NPR station, make a donation if you can, and add the wish of a donation to your wishlist no matter what. Or, make a wish for a volunteer day at a local soup kitchen. That tells your friends and family that giving back to the community is important to you, and that giving a specific donation in your name is the best possible gift to you.
Once a gift to your favorite charity is on your wishlist, your friends and family can show their support by both fulfilling the wish and hitting that little "me too" button to add the wish to their wishlists as well.
We think Wishzilla is a great way to do gifts. We've been working on making it that way for over fourteen years (in Internet time, that's like... going back to the stone age), and our long-time users will tell you that it works.
"Itâ€™s just what our family uses every Christmas," says Judy from North Carolina. "It made our shopping so easy this year, knowing that we were getting folks exactly what they wanted!" from Tami in Ohio.
Scroogenomics proves that bad gift giving ain't funny. It costs. We think it's time for a gifting revolution. Now, there are lots of wish list services out there that can help you hone in on the right gifts. Find one that works for you and use it. But however it happens, we really need to stop this nonsense of just giving willy-nilly.
It just so happens that we've built Wishzilla to be the best way to do gifts, period. Give it a try and you won't be disappointed.
Last year we declared war on regifting, a wasteful practice easily avoided by just giving a great gift in the first place. Well, this year we're taking it to a whole new level, and we're asking you to help us put our economy back on track by giving gifts that will truly be valued.
Scroogenomics? Bah, humbug! Hello to Zillanomics!