New study shows that a gesture that means well could have significant negative consequences
With an eternal eye on the best financial strategies, it may seem obvious to you as a financial advisor to save people money wherever possible.
But it’s better to shun your professional instincts when gifting, according to a new study from The Ohio State University’s Fisher College of Business.
That’s because making a gift of something that will – or that you infer will - save the recipient money can make them feel inferior to you as the gift-giver with an inference of a lower status.
“Most of us have this belief that any gift we give is going to be appreciated – but the way a gift is presented can influence how people feel about it,” said Fisher’s Grant Donnelly, co-author of the study and assistant professor of marketing.
In a study of 405 people, researchers asked about the feelings experienced when they had received a money-saving gift. Respondents used words such as “embarrassed”, “ashamed”, and “bad”.
“They thought the gift-giver was implying they couldn’t take care of themselves and were incompetent because they needed money,” Donnelly said.
So, what should you give?
While a money-saving gift might backfire on the giver, a gift that saves the recipient time is a winner.
And one part of the study provides a useful twist on a popular marketing play, gift cards.
Half of the participants were given a $5 Starbucks gift card with the message “I know you’ve been stressed for money lately. I hope you’ll enjoy this gift card in hopes that it will save you some money.”
The other half were given an identical card but the message related to saving them time in store.
Those receiving the money-saving message reacted more negatively than those who felt they were being gifted a time-saver.
“We can have this perspective gap where we don’t really consider how our gifts are received. It can harm your relationship with the recipient if you’re not careful,” Donnelly said. “It may be best to give a money-saving gift without acknowledging the reason, or to find a way to make it about saving time.”
The study was published recently in the Journal of the Association for Consumer Research and co-authors were Alice Lee-Yoon, a doctoral student at the University of California, Los Angeles, and Ashley Williams, assistant professor at the Harvard Business School.