A Risk Manager's Approach to Gift Giving

A young man shakes a wrapped present, listening to guess what's inside.

Have you noticed that people only tend to say, “It’s the thought that counts,” when a gift is poorly thought out? No one gets a fantastic gift and then shrugs and says, “Well, this is amazing, but it’s really the thought that counts.”

Whether it’s a gift that didn’t work out as intended or an extravagant presentation that fell short, being told “It’s the thought that counts” is sometimes a veiled way of saying, “Wish you would have thought about this a little more.”

You know what kind of people are really good at thinking things through? Risk managers. Their job is not only to look at everything that can go wrong for a business, but also to find opportunities for gaining an advantage. If you define risk as simply “uncertainty,” then their job is to minimize uncertainty by being really detailed planners.

To get a better idea of what it’s like to manage risk, here’s a handy guide to choosing your holiday gifts this year—from the mindset of a risk manager. We broke each of them down by risks, opportunities and overall merit.

Gift Card

Risks: Gift cards can easily be perceived as last minute and impersonal. The more specific the card is, the greater the chance that the recipient won’t appreciate or be able to use it. For instance, a gift card to a steakhouse may upset someone whose New Year’s resolution is to become a vegetarian. Economists also advise that gift cards are wildly inefficient.

Opportunities: A gift card to a specific business that you know the recipient uniquely enjoys could demonstrate your care for that person. Gift cards also can serve as a prompt for an experience, and research shows that people value experiences more than items.

Assessment: Gift cards are advisable if you have little information on a recipient’s wants and needs or if you have specific knowledge about an experience they would or do enjoy. Otherwise, they are inefficient and potentially wasteful. 

Charitable Donation

Risks: Even if heartfelt, donations on someone else’s behalf can be perceived negatively. Some people really love getting stuff and will be upset to have that tradition broken, while others may perceive it as pretentious if they think you’re trying to act better than them. Also, one person’s charity may be another’s controversial cause, and some groups are rated higher than others.

Opportunities: Giving to the right cause has to the potential to be the most satisfying and meaningful gift for all involved. Your gift can have a much larger impact on someone who is more in need, and donating to charity can be as effective at making the givers feel better as it is at helping others. Also, donations are usually tax-deductible.

AssessmentA charitable donation has the potential to be a powerful gift, but it still poses the risk of backfiring. Charitable donations to reputable groups that align with the recipient’s values, combined with a small token of appreciation to satisfy the need for a physical gift, can lower the risk and broaden the appeal.


Risks: Choosing subscription-based gifts can be a leap of faith, because you must trust the provider to deliver on its promise. Rather than assessing the worth of an item yourself, you have to rely on the company’s staff to select high-quality items on a regular basis (often after you’ve already paid them). While some monthly delivery services are almost universally well-regarded, others can deliver boxes of junk that tend to not only be wasteful, but also burdensome to the recipient.

Opportunities: Subscriptions are literally the gift that keeps on giving. The right subscription offers an extended period of exciting arrivals for the recipient, creating a continual feed of goodwill between you and the recipient. It may also offer a more efficient delivery mechanism than the traditional experience of gaining a pile of items you receive all at once, some of which may expire or that you may forget about.

Assessment: A subscription has long-term value if you can trust that the distributor’s selections will closely match the recipient’s interests and standards.


Risks: Clothing is a high-risk gift choice for a number of reasons, and it seems to fall short more often than succeeds. The wide variance between style preferences and garment fits makes it exceedingly difficult to choose optimum clothing gifts. 

Opportunities: A quality piece of clothing can be something someone uses and remembers for years. A favorite jacket or sweater, especially something the recipient might not have readily purchased, can be a part of that person’s wardrobe for a long time to come.

Assessment: Clothing that requires a specific fit is too risky, even if you have an exact size, because cuts vary among designers. If you know a person’s style well, something that is relatively one size fits all, like a hat, or doesn’t have to be form fitting, like a jacket, can be the safest and longest-lasting choice. Gift receipts, if available, can also be particularly useful with this gift choice!

Homemade Item

Risks: Homemade gifts bring their own risks: your own ability to execute a plan, with no guarantee that the end result will be usable—and no return policy available. In fact, a recent Associated Press poll found that 62 percent of Americans say they’d rather receive a store-bought gift. Homemade items aren’t necessarily less expensive either, as manufacturers often utilize efficiencies to produce items cheaper than individuals can, and your own project cost could balloon if you encounter errors along the way.

Opportunities: A homemade gift is undeniably the most unique gift you can choose, and because it requires more effort than purchasing something pre-made, it also inherently demonstrates your care for the recipient. It’s the thought and the effort that counts—and with any luck, the quality and enjoyment follows.

Assessment: With a homemade gift, you have to nail the idea and the execution. If you’re handy or willing to learn how to make your project as skillfully as possible, this should be a strong consideration. But make absolutely sure to conservatively estimate your skill and the project costs ahead of time—the added stress of a project spiraling out of control can ruin your own holiday enjoyment.

Luxury Car

Risks: Very costly regret.

Opportunities: Well, best-case scenario is it turns out like any of the cheesy car commercials you see each holiday season, big red bows and all. Apparently this happens in real life, too.

Assessment: All the risks of car-buying aside, if you can afford to make all the payments and cover the insurance, more power to you. Otherwise, this may actually be one of the worst gifts out there.