Though many see Christmas as a time of generosity and cheer, others see waste. A small number study its inefficiencies
Save time by listening to our audio articles as you multitaskIn 1993 Joel Waldfogel of the University of Minnesota identified a “deadweight loss” when he studied the difference between the cost of seasonal gifts and how much their recipients valued them after they had accounted for exchanges and put sentimental value aside. Today he says that on average cash spent on another person yields around 85% of the benefit of cash they spend on themselves.
There are ways to reduce Christmas losses. One is the use of gift cards, which give recipients some choice. But Britons don’t seem to like them much. A survey of adults from Ipsos, a pollster, found that 43% of Americans, 40% of the French and only 29% of Britons were planning to give them for Christmas 2022. Making it easier to return unwanted gifts should help.
As e-commerce has expanded, so too have ways of sending stuff back. But returns are a headache for retailers. On average it costs between £5 and £10 to put a product back on the shelves, says Mr Gerrie, thanks to the shipping, inspecting and repackaging required. Increasingly, retailers are charging shoppers to return goods. ZigZag’s data suggest the number of paid-for returns has more than doubled since last year, while the number of free returns has fallen.
Another Christmas inefficiency for retailers is the fact that it comes but once a year. Gary Grant of The Entertainer, which sells toys, jokes that he would love it if festive sales were spread throughout the year rather than being crammed into the final quarter. He is understaffed, he says, during the holiday season, when he expands his workforce by 50%, and then overstaffed the rest of the year.
Over time, it does seem that consumers are spreading their spending a little more thinly across the year. In 1986 25% of the year’s spending on clothing was in November and December. In 2019 the share was 22%. Seasonality in retail spending, which includes restaurants, is also falling. Seasonal employment as a share of the total between October and December has been decreasing since 1997, according to the Office for National Statistics.
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