Using Perspective to View Gift Cards

While shopping a couple of days ago, I noticed some people gathered around the gift card display at a local store. There were gift cards for a number of other stores and restaurants in town. 

There are a number of ways to interpret this. One is that those people were too lazy to try to figure out a good Christmas gift for some of the people on their list and decided to give them a gift card, which is only slightly more personal than an envelope full of cash. Another is that they didn’t really understand the tastes of the people they were buying for, for example, unable to come up with something appropriate for teenaged grandchildren living many miles away. A third is that it is so difficult to buy for people who have met all their wants and needs. The third is a distinct possibility in a country where nearly everyone has enough stuff. 

Gift cards originated in the mid-1990s. Around that time common ads asked, “What can you get for the man (or woman) who has everything?" Yes, Americans at that time already had most of everything they needed, especially compared to earlier times. When they were popular, the solution recommended by these ads was something exotic or unusual – and probably not what the person really wanted anyway.

Since then the market for gift cards has skyrocketed, growing from just over $80 billion in 2009 to $160 billion last year. Consumers are tempted with special offers and discounts from nearly every store or restaurant. Retailers also love gift cards because a small fraction of them goes unspent, pure profit for the store, and when people use them they typically spend more than the value of the card.

Does this mean that the number of men (and women) who have everything is growing? That could be the case, but we don’t seem to appreciate it. Gift cards are a convenient way to deal with this problem, if it can be called a problem.

This information comes from the Progress Paradox (p. 80) written in 2003: “Average Americans…not only live better than more than 99 percent of the human beings who have ever existed, they live better than most of the royalty in history.” We are better off than ever. In 1900, the life expectancy of an average American at birth was approximately 47 years, and what were then considered luxuries only enjoyed by the very rich are now very common, considered as necessities by nearly everyone. We also have conveniences they never dreamed of. In a historical sense twenty-first century Americans are the people who have everything - making it so hard to shop for us.

A good, healthy reaction at seeing the crowd around the gift cards is to rejoice that those people have it so good that they can afford to buy the gift cards (at an average around $50 each) and that their friends and relatives are so well off that it presents a challenge to those trying to figure out what to get them for Christmas (or any other occasion). 

This good feeling about the state of our society may help to buoy us up over the weeks ahead – at least until Congress is back in session. 

Peace On Earth?

Only a few months ago everyone, regardless of political views, seemed to be saying, “I can’t wait for this campaign to be over.”  Everyone, except for those few who really relished a good fight, was apparently thinking the same thing, that the presidential campaign was the nastiest, most tiring and most divisive in memory.  The general sentiment was how nice it would be to get back to a calmer time when most of the news was not about accusations tossed back and forth by the candidates, about fist fights breaking out after political rallies, about protests against the appearance of one of the candidates at a sight, or about leaks revealing each of the candidates prior criminal history.

For a long time people were encouraged to go out of their way not to bring up politics at family gatherings or social events for fear of causing major fallout.  Comments and posts on social media were as aggressive and mean as the daily sniping between the parties or the news media’s attempts to dig up the dirt.  Instead of calmly discussing points of disagreement, so-called friends called each other vile names when they found themselves at odds over which candidate was best – or at least, the lesser evil.  All that emotion and anger were exhausting, even to those on the sidelines, not directly participating.  We just hoped Election Day would arrive soon and it would all be over.

Now that the election has come and gone, it’s not over.  The sniping, bashing and name calling continue, not between the candidates anymore, but between their advocates and a still divided population, led by a mainstream media which, despite an attempt to appear non-partisan, can’t seem to hide the fact that they obviously felt the wrong candidate won.  On social media you see that one side has gotten out their crystal balls to determine what a disaster the next four years is going to be.  They are angry and worried sick.  For a while they called for recounts or a rebellion within the Electoral College in a futile attempt to overturn the election results.

The other side, again with crystal balls in hand, predicts that we are better off, and each attempt to smear the President-elect or question the outcome is met with sneers and equally nasty comments.

The truth is that no one has a crystal ball.  No one can predict the future with any accuracy.  If that were the case, we would all be rich and not so worried about it.  We just have to take what comes and hope for the best.  I wrote on the day before the election that most people were voting against rather than for a candidate, and that the poor choices we were left with was our own fault for not demanding better from the parties and from government in general.  Perhaps those who were griping about gridlock for the last four years will be praying for it over the next four.  This is not the answer.  The real solution is to use critical thinking to continuously question politicians, the media and advertisers, not reacting to the hype and forcing them to be honest.

In any case, this is not the season for anger and hate.  It’s the season for peace and joy and goodwill.  Let’s try to leave the politics behind just for a little while.  So over the next couple of days, no matter who you are spending time with and no matter how obnoxious Uncle So-and-so gets, try to ignore the provocation.  Take a deep breath and count to ten.  It doesn’t matter what your religious affiliation is or what this end of the year means to you personally, try to find and share some of that peace, joy and goodwill – even if you have to fake it.

It's Perspective Season

The dimension of perspective helps us distinguish between what is important and what is trivial.  One positive side effect is the ability to separate wants from needs, which lead to the ability to prioritize conflicting desires.  Another side effect is gratitude, appreciating what we have and not always yearning for more, bigger or better.

One week ago today the news was filled with stories about how retailers and the shipping companies were adjusting their schedules and updating websites to show the absolute last date to order on line and guarantee delivery by December 24.  They were in the process of fine tuning expectations to avoid over-promising and disappointing.

“After facing an avalanche of criticism last year for failing to deliver thousands of packages by Christmas Eve,” UPS is making extra efforts to ensure everything is delivered as expected.  Both UPS and FedEx “began strategizing immediately after last year's disappointing holiday performance,” which combined bad weather with an unexpected increase in online shopping. US Postal Service will likewise be going “the extra mile to ensure packages are delivered” on time and they too don’t lose customers.

Last year some retailers overpromised regarding last-minute delivery, “leaving some online shoppers irate.”  This year they are being more careful about dates and guarantees because “when you miss that date, trouble ensues."

This is where perspective comes in.  Expressions like "an avalanche of criticism," “irate” and “trouble ensues” certainly paints a picture of out-of-whack behavior in this dimension.  Who are these people that their biggest problem is whether Christmas presents, which were obviously not important enough to plan ahead for, are delivered on time?  If they have a delivery address, they have a home, which not everyone can say.  Chances are they have food on the table and a healthy family to share it with.   Even at this time of the year it's so easy for them to forget their blessings and become irate when their last-minute behavior combined with high demand and bad weather to cause a delay in delivery.  

Is this all about a fragile ego – yes, I put it off to the last minute, but I don’t want to be caught and embarrassed?  Is it about not wanting to disappoint the children, because we, aided by society (and especially advertisers) have built their expectations to the bursting point over the excitement of tearing into presents on Christmas morning?  Did we also forget to remind them about their blessings?  Finally, are adults through their behavior teaching their children that the way to respond to disappointment is to throw a tantrum?

It’s too bad this subject even comes up.  Americans who see Christmas as a religious holiday can worship as they choose – one more thing to be grateful for.  Those who do not, need not be committed to any particular day.  What’s wrong with the following weekend?  This kind of patience and flexibility are a better example to our children than stressing out over where all the last-minute packages are.  In short, everyone has bigger problems than what’s been delivered by a particular day.  Some people just don’t seem to have sorted this fact out yet.

Black Friday Choices

This Friday is Black Friday, so let’s talk turkey about holiday spending.  The New York Times tells us that falling gas prices will spur holiday spending.  Low- and middle-income families, “the most economically fragile part of the population (are) already feeling some relief, which is likely to lead to extra spending on a variety of other goods and services.”  The Wall Street Journal reinforces this notion by pointing out that October results show that “U.S. consumers are spending more at restaurants as gas prices fall.”  They are not alone in their predictions; we hear the same from other sources.

That’s probably good news for the fat-cat investors as retailers may surpass expectations and the stock market will continue to rise, but ultimately bad news for those low- and middle-income families who immediately spend the windfall.  According to these news agencies and the statistics they gather, Americans don’t have the discipline or willpower to put away the extra cash for emergencies.

Just last summer, a Bankrate.com survey, based on telephone interviews with more than 1,000 adults, a reasonably large sample size, told us that only 23% of Americans had the recommended emergency savings to cover six months of expenses, and over one quarter, 26%, had no emergency savings at all. 

One in four, of these most economically fragile are living paycheck to paycheck.  Management theory tells us that people make changes only when the effort of changing is less than the pain of not changing.  Is the pain, fear, or insecurity of living paycheck to paycheck not great enough to motivate people, who find a little extra in their wallet after filling the car, to put some aside for a rainy day? – Apparently not. 

I remember back in earlier times when the gas prices spiked and there were more incidents of drivers out of gas on the side of the road explaining how they could only afford to fill the tank half way.  If all the extra money goes to gift buying and restaurant meals, how will they manage during another rebound in gas prices?  Furthermore, how will they be able to afford even higher deductibles on health insurance in case of a medical emergency?  (Last year the average individual deductible for ACA’s silver plan was $2907 and expected to increase.)   These are the things an emergency fund is used for.

Unspent gas money is insignificant compared to possible unexpected expenses.  Put it in the bank; stuff it in the mattress!  Those who just decide to spend it are making an unconscious decision to remain in that category referred to as "the most economically fragile."  But I guess the pain is not yet bad enough.

A Gift for You

Merry Christmas!  Whether you celebrate it or not, Christmas is still tomorrow, and I don’t think it’s offensive to wish everyone a good day tomorrow and every day.

I also hope the understanding spreads far and wide that behavior has consequences and that the only sure way to improve our outcomes in America is to improve the behavioral inputs in the five key dimensions.

To show my personal dedication to the cause, I am offering each of my readers a Christmas present.  It’s important to good critical thinking that we not be tricked by all the statistical reference in the news and advertising and that we not spend our money where the probability of return is low.  Accordingly, I have attached a link to a free, PDF copy of my book, Statistics: Short and Simple.

Several years ago after teaching night classes to business majors, watching them struggle and psyche themselves out, I wrote this very short explanation – all you need to know about statistics without having to do a single calculation.  The math can be done by any spreadsheet application.  It’s knowing what to do, why you are doing it, and what to do with the answer that’s really important.

So download and enjoy!  Send a copy to your friends!  I know a statistics book was probably not on your wish list, but some of the best gifts are the ones you don’t anticipate.  Besides, think of all the royalties I am foregoing by giving it away for free! 

Thank you all and Merry Christmas.