Perception of cheap gifts shifts to savvy, not chintzy

The number of people willing to buy gifts for less than $10 rose to 4 percent this holiday shopping season.
The number of people willing to buy gifts for less than $10 rose to 4 percent this holiday shopping season. Associated Press

Cheap is the new chic for holiday gifts.

Jana Montero, who has in the past bought loved ones iPods and tablets for Christmas, has changed her attitude about gift-giving: This holiday season, she’s grabbing candle sets and serving dishes that cost less than$30 to give to family and friends.

Montero, who lives in New York and is saving to buy a home with her husband, said: “We want to make sure we’re conscious of what we’re spending.”

More holiday shoppers are expected to be like Montero this season in the latest twist in a theme that has played out since the recession. For nearly a decade, shoppers have been more cautious and practical about their spending, doing more bargain shopping and hunting for deals. But recently, shoppers have taken that practice a step further.

They’re becoming more open to buying gifts that in the past might have been considered downright cheap. So, they’re not just looking for big discounts on extravagant, expensive designer and brand name goods; they’re starting out with the intention of getting less expensive items that they might not have considered buying as gifts in the past.

The number of people willing to buy gifts during this holiday shopping season for less than $10 rose to 4 percent this year from 1 percent last year, according to a survey of 1,000 people by America’s Research Group, a firm that researches consumer behavior. Meanwhile, the number of people willing to spend $26 to $35 fell to 18 percent from 22 percent.

Overall, people are expected to spend modestly more this holiday season. The National Retail Federation predicts holiday spending in November and December will be up 3.7 percent, to $630.5 billion , slower than the 4.1 percent growth during the same period last year.

The shift in attitude toward cheap is partly rooted in economics, says Jeff Green, a retailing consultant based in Phoenix. Shoppers who watched their budgets vigilantly during the recession continue to feel the pressure of keeping tabs on what they’re spending even as the economy improves. “Even with the unemployment rate down, I don’t think people feel secure in their jobs,” he says.

But it’s also rooted in a change in consumer psychology. Some shoppers have become suspicious of retailers who continually slash prices, retail consultant Paco Underhill says. In other words, people are beginning to question whether they’re paying too much for the gifts they’re buying, so now they’re starting out with the expectation that they’ll buy really cheap items.

For example, Stacy Roberts saw plenty of sales when she visited The Fashion Mall at Keystone in Indianapolis on Saturday, but she wasn’t impressed. She said shoppers need to start following the price of something they want to buy for the holidays a few months beforehand, so they can tell if the sale price truly is a bargain.

“To me, deals are B.S.,” she says.