We Waste $700 Billion a Year on Gifts

imageA survey conducted by TIME magazine in 2014 revealed that 71% of Americans did not expect to like the gifts they received over the holiday season. This is a staggering statistic, especially considering that Forbes magazine estimates Americans will spend over one trillion dollars this year on gifts. That means Americans are wasting nearly $700 billion per year on gifts they don’t want. To put that number in perspective, the United States’ military budget evened out to about $597 billion for the 2015 fiscal year.

There is a serious breakdown in communication between those buying gifts and those receiving them, with 54% of us flatly admitting we won’t want a gift we get this year. On average, we receive 2.3 unwanted gifts per year, with only 39% of gifts being kept, while 26% are exchanged, 20% are given away, 3% are donated, and 1% are just thrown out. The waste is not a result of lack of effort. Americans spend an average of 14 hours every year purchasing gifts. Considering the unprecedented level of interaction we now experience over social media, and the growth of quick and easy online shopping, it is shocking that we waste so much time and money.

It seems like we just have to admit that we have a hard time figuring out what our loved ones want and should just ask them instead of guessing.

It gets worse. Although most Americans are very responsible when buying gifts, with 61% of consumers saying they wait to buy their gifts on sale, we are not realizing the full benefit of the technology available to us. Just because an item from one retailer is “on sale” doesn’t mean another retailer does not know about it and is not trying to undercut that sales price.

Consumers, trusting that they are getting a rock bottom price for an item on sale, are more often than not misled. Most do not take advantage of brutal price cutting which has led to the well publicized carnage in the retail sector, with stalwart brands such as Macy’s and Sears shutting down stores, and abandoned malls proliferating all over the country.

Millennials use Google’s price-checker tool to find the lowest prices for an item, but Google’s amazing tool is not seamlessly integrated into vendors to make for a convenient shopping experience. Still, price checking has enormous benefits.

A generic shopping list including a BaBlissPro Hair Straightener, Keurig Single Serve Coffee Maker, Samsung 32” 1080p TV, and Philips Norelco Electric Shaver costs $879.25 at different retailers without a price check. That amount is relatively close to the average of $929 that Americans spend on gifts over the holidays. When price-checked, the same products can be purchased online for only $574.09, saving the shopper from wasting over $300 with savings of nearly 30%!!  That’s another $100 billion we waste every year by not price checking.

One man’s waste being another man’s treasure, Silicon Valley is already viewing this enormous waste as an opportunity to make money. One instance of that is the iTunes app, Wishworks. I used the app to check prices on items in the article. It offers a Wish List feature to make sure you know what your loved ones want, the ability to check prices from multiple vendors in real time, and the power to seamlessly place orders on Amazon, Walmart and Best Buy from within the app. By reducing your shopping to a few clicks, it saves you time too. Hopefully you can put the dozens of hours Americans spend shopping every year to better use.