Whether you cel­e­brate Christmas, Hanukkah or Kwanzaa, gift giving is a part of most hol­iday tra­di­tions this time of year. Many fac­tors go into selecting and pur­chasing hol­iday gifts. We asked Tony Gao, assis­tant pro­fessor of mar­keting in the Col­lege of Busi­ness Admin­is­tra­tion, to explain some gift-​​giving trends and what moti­vates con­sumers’ gift-​​buying behaviors. 

What consumer-​​behavior trends have you observed in recent years related to gift giving? 

Cer­tain things rarely change when it comes to con­sumer gift giving. Two exam­ples are the enduring ten­dency for people to give gifts to com­mem­o­rate impor­tant hol­i­days and occa­sions and the annual evo­lu­tion of what con­sti­tute the hottest hol­iday gift items. In the mean­time, a few emer­gent trends have been evi­dent in recent years, including the neg­a­tive impact of the reces­sion on con­sumers’ hol­iday shop­ping behav­iors and con­sumers’ increased use of gift cards in lieu of phys­ical merchandise.

What role does mar­keting by the retail industry have on gift pur­chases or gift giving tra­di­tions in general?  

The leading rea­sons why con­sumers buy gifts include expres­sions of love, care, appre­ci­a­tion, com­pan­ion­ship and sup­port; as well as deep needs for com­mem­o­rating impor­tant life and career mile­stones. Many con­sumer goods com­pa­nies and retailers design mar­keting mes­sages that speak to these very emo­tions and moti­va­tions. Indeed, some observers have empha­sized the large role of the media and mar­keters in cre­ating and per­pet­u­ating gift-​​shopping rit­uals among the consumers.

Given the cur­rent economy, have hol­iday gift returns and “re-​​gifting” increased? Have they made any notice­able impact on retail businesses?  

The sober eco­nomic con­di­tions in recent years have not been kind to retailers, as many com­pa­nies have seen con­sumer spending cuts, rising dis­counting pres­sure and spikes in mer­chan­dise returns all at the same time. According to a report by the National Retail Fed­er­a­tion, as much as 10 per­cent of all hol­iday pur­chases in recent years have ended up in mer­chan­dise returns. While buyers’ remorse may explain why some con­sumers return prod­ucts bought out of a shop­ping impulse, many mer­chan­dise returns in the hol­iday shop­ping season fall into the cat­e­gory of gift returns. Many con­sumers have also increas­ingly resorted to re-​​gifting as a way to econ­o­mize during the hol­iday gift-​​giving season.

Hol­iday gift returns, and to some extent, re-​​gifting, could spell reduced rev­enue and wors­ened bottom-​​line for many retailers, but smart com­pa­nies could use gift returns as an oppor­tu­nity to build good­will and loy­alty among shop­pers and non-​​shoppers. Indeed, gen­erous gift-​​return poli­cies, such as those intro­duced by Macy’s and Kohl’s in recent years, have received praise from cus­tomers and earned free pos­i­tive pub­licity for the companies.