Let’s say you’ve been invited to a wedding and want to figure out how much you should spend on a wedding gift for the newly-weds. It’s a question that virtually all of us have faced at one time or another.  The answer is dictated by rules of etiquette that are influenced by culture, social class, and even the economic environment. But these rules are often imprecise—buy something from the gift registry, don’t spend less than $50, if you make more you should give more, etc. And in some instances, giving a gift using such rules leads to disappointment. One irate Canadian bride felt compelled to text her guests this way:

“I’m not sure if it’s the first wedding you have been to, but for your next wedding … people give envelopes. I lost out on $200 covering you and your dates plate . … and got fluffy whip and sour patch kids in return. Just a heads-up for the future.”

How to avoid such a reprimand?  It’s simple. In this post, I want to suggest four different methods to figure out how much to spend on a wedding gift. Each method is based on principles of economics and psychology, so if things go wrong, at least you will have an excuse for how you chose how much to spend. And my first and foremost goal here is to come up with a precise, logical answer.

1) The Economic Calculation Method

There are intricate economics-based methods of answering the question of how much to spend on a wedding gift. But my economics-based suggestion is simple and straightforward: The cost of your wedding gift should be roughly equal to the total expense incurred by the bride and the groom in hosting you at their wedding.

Wedding by hot-vision Flickr Licensed Under CC BY 2.0
Source: Wedding by hot-vision Flickr Licensed Under CC BY 2.0

As an example, let’s say that you have been invited to a wedding in Houston, where the average cost per wedding guest is about $125.  Your wedding gift should cost $125.  If you have been invited to bring a significant other (and you do), the gift should cost $250, and so on.  While I have used the average cost for this example, in practice, you will have to figure out how much the bride and groom are spending per guest by considering the venue, the type of food that will be served, the music arrangements, and so on. Or you could enquire politely and find out from whoever invited you to the wedding.

Note that with this method, any costs that you incur in getting to the wedding (airfare, car rental), your accommodations (hotel room, Airbnb), and your attire (tuxedo rental, new dress) are irrelevant.  The biggest benefit of this rule is that if all (or most) attendees follow it, the newly-weds will start their life together after marriage with little or no debt. And what is more, this rule is versatile. Unlike etiquette-based rules, it works well no matter how closely you are related to the bride and groom.

2) The Reciprocity Method

Where the economic calculation method focused on how much it cost the bride and groom to have you at their wedding, the reciprocity method uses the cost of the wedding gift the inviter gave you when you got married. This is how consumer psychologists Cathy Goodwin, Kelly Smith, and Susan Spiggle define reciprocity:

“Reciprocity…represents giving a gift as part of a mutual exchange or in return for another gift, as when family members exchange gifts at Christmas or wedding gifts over the course of their lifetimes.”

Let’s say you are attending someone’s wedding, and they gave you a $100 gift when you got married a couple of years ago. This is where you could use the reciprocity method and spend the same amount, about $100, for their wedding gift. As you can see, this method is only useful when you have previously received a wedding gift from the inviter. It won’t work (or rather, won’t give you precise guidance) if the inviter is getting married before you.

3) The Emotional Significance Method

This third method applies mainly to the bride or groom’s close family and friends. It involves giving non-cash wedding gifts like jewelry, a family heirloom, etc., that have emotional significance well beyond dollars and cents.

Take the case of Ian Ross (see video below) who wanted to propose to his girlfriend Maddy Wendell a couple of years ago. For both economic and emotional reasons, he approached Maddy’s grandmother and eventually got her engagement ring as an advance wedding gift to propose to Maddy. The grandmother’s wedding gift, a .77 carat old-European-cut diamond ring, is a perfect example of an emotionally significant gift. It certainly had economic value. It was worth thousands of dollars. But its real value to the couple lay in the fact that it was a family heirloom with tremendous emotional meaning.

As this example illustrates, with the emotional significance method, economic calculations go out the window in deciding how much to spend for a wedding gift.

4) The Generous Gift Method

Wedding photos by Katsu Nojiri Flickr Licensed Under CC BY 2.0
Source: Wedding photos by Katsu Nojiri Flickr Licensed Under CC BY 2.0

This final method applies to situations in which you want to go way above and beyond economic principles, psychological norms of reciprocity, and social norms of etiquette in giving a wedding gift. If you want to help the newly-weds begin their married life on a good financial footing, giving an extremely generous gift is the way to go. This method can be used by anyone but is typically used by close family members (parents, grandparents, etc.). It involves giving a substantial sum of money, either to defray costs of the wedding or for something else like paying down student loans, contributing towards down payment on a house, etc. Here are two examples from the Hellobee online community of people using the generous gift method:

“We got a VERY generous gift from my husband's grandmother and family in Taiwan of 30k. My husband tells me it's tradition there to give large sums of money as wedding gifts. It's sitting in our savings and it's really helped us build our savings account.”

“Each of our parents gave us $8 - $10k for wedding costs. MIL gave us $3k as her gift to us. One of my aunts gave us $1k. One of my dad's friends (who we don't know very well) gifted us $500."

Conclusion

So how do the amounts from these methods line up with what people are actually spending on wedding gifts? They are a little on the higher side, but they are not too far off. In 2015, a survey of wedding attendees reported that they spent $106 on average for a wedding gift ($142 if the recipient was a family member). A more recent survey by FiveThirtyEight.com found similar values: $147 for immediate family, $50-$80 for others.

I want to make one final point. Although the focus of this post was on how much to spend on a wedding gift, the issue of what gift to give is just as important. And here, the answer is simple. In a nutshell, give cash!

About Me

I teach marketing and pricing to MBA students at Rice University. You can find more information about me on my website or follow me on LinkedIn, Facebook, or Twitter @ud.

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