HOW TO GIVE BETTER HOLIDAY GIFTS (ACCORDING TO SCIENCE)

These strategies, backed by behavioral finance, can help you find presents that your loved ones will truly enjoy.

- BY ALICIA ADAMCZYK

It may be better to give than to receive, but that doesn’t make picking out holiday presents for your family and friends any easier.

Even with all the festive cheer that the season brings, it can be stressful to shop for the perfect gift for everyone on your list if you're worried the folks you hold near and dear won't be delighted by what they find under the tree.

With gift givers spending more than ever, that pressure is mounting. In 2024, U.S. consumers dropped a record $994 billion on holiday shopping, according to the National Retail Federation, and projections by the Mastercard Economic Institute suggest holiday sales will continue to climb this year, by an estimated 3.6%. Higher-income shoppers, buoyed by a surging stock market, are likely to spend even more.

Shelling out bigger bucks, though, doesn’t necessarily yield better gifts for the people you love. The NRF says holiday returns last year were 17% higher than average, suggesting a growing number of presents are missing the mark, putting added pressure on gift givers this year.

“We give gifts because we want to make people happy, give them something they'll enjoy and signal we care about them,” says Elanor Williams, an associate professor of marketing at Washington University and a leading gifting researcher. “And therefore we stress about it.”

How can you reduce that anxiety and land on gifts the people you care about will love? Science can help.

A growing body of research from behavioral finance experts identifies the kinds of presents that people typically like best and the mental quirks that prevent many people from buying them. Understanding these preferences and the cognitive traps that lead gift givers astray can help ensure your holiday presents not only stand out when they’re unwrapped but also stand the test of time.