Why giving more is actually seen as giving less

December 13, 2011

Every gift-giver knows the trick to making a ho-hum present look substantial: You enclose a gift card in the envelope, tuck some chocolates among the ribbons or attach smaller items to the main gift as tiny wrapped appendages. Right?

The strategy works in theory – but it's bound to backfire, researchers say.

In fact, little add-ons reduce the recipient's perceived value of the overall gift, says Kimberlee Weaver, assistant professor of marketing at the Pamplin College of Business in Blacksburg, Virginia.

Given the choice, a well-to-do giver is more likely to send a cashmere sweater and $10 gift card combo rather than wrapping up just one or the other. But chances are the recipient will view the cashmere sweater alone as a gift with more heft, Ms. Weaver says.

Unwittingly, she adds, the giver "has just cheapened the gift package by spending an extra $10 on it."

Ms. Weaver and colleagues at the University of Michigan refer to the more-is-better foible as "The Presenter's Paradox," in a research article slated for publication in the Journal of Consumer Research.

A similar paradox applies in situations ranging from hotel promotions to scholarships and even the penal system, Ms. Weaver says.

In one study, participants perceived a $750 fine for littering as a greater penalty than a $750 fine plus two hours of community service. Adding the community service softened the penalty's impact, she says.

In other words, tactics to strengthen the point run the risk of diluting the overall package.

This Christmas, instead of buying measly gift cards – a quarter of which may go unredeemed – consider donating that extra $10 to disaster relief or tucking aside $10 every week to save $520 a year.

You might feel like a hoarder, but everyone else will think you're unstinting in your love.

Are you guilty of embellishing gifts to make them seem more expensive? Will knowing about the "presenter's paradox" change your giving style?

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