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The pandemic ended big gift exchanges. Here’s what we’re doing instead.

This year, Americans say they’re focusing on practical gifts — air fryers, sweaters, gift cards — for a select few: “I’m done buying stuff for the sake of buying it."

Shoppers browse the aisles Saturday at a Target in Niles, Ill. Many Americans are rethinking their approach to gift-giving this year, scaling back on quantity and leaning into practical presents like small kitchen appliances and, increasingly, gift cards. (Nam Y. Huh/AP)

For many Americans, the casual holiday exchange is over: No more White Elephant gifts for extended family or Secret Santa at work.

Heather Schmidt has trimmed dozens of names off her gift list — neighbors, colleagues, her kids’ teachers and coaches — buying only for a handful of family members. And she has no regrets. This Christmas is about starting over.

“I’m done buying stuff for the sake of buying it,” the 39-year-old said. “I don’t mean to sound ungrateful, but I am tired of coming home with bags of trinket-y stuff that lasts for a few days before it becomes plastic trash.”

U.S. consumers are rethinking their approach to gift-giving, scaling back on what they buy and for whom, with a focus on the practical: small kitchen appliances like air fryers, books and, increasingly, gift cards. The pandemic, which last year put an abrupt halt to communal gift exchanges of all kinds and has compelled many families to reconsider long-held traditions. Rising prices and supply chain disruptions that have led to sparse store shelves have only accelerated the shift.

More shoppers are buying secondhand goods, or simply giving cash or gift cards this year. Others are doing away with the fuss and waste of wrapping paper, opting instead for reusable gift bags or, in some cases, piling unadorned Amazon boxes under the tree. (Amazon founder Jeff Bezos owns The Washington Post.)

“A lot of obligations — the office Christmas party and big family gift exchanges — have disappeared,” said Milton Pedraza, chief executive of the Luxury Institute, a consulting and research firm. “Instead we’re thinking practically by focusing on needs and trading up to higher-quality products.”

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That sensibility has fueled a fundamental change this holiday season. Research shows that gift-givers typically favor novelty items over useful ones, says Julian Givi, a marketing professor at West Virginia University who studies consumer behavior and gift giving. But the covid crisis has changed peoples’ priorities both for themselves and those close to them.

“Consumers love giving fun, flashy, unique gifts, but the pandemic seems to have turned that innate desire on its head,” he said. “People are saying, ‘I really to want to buy my sister a margarita machine or a chocolate fondue set. But I should get her a gift card for gas instead.'"

Retailers adapted by prioritizing more practical, bigger-ticket items than impulse buys. At J. Crew, the season’s biggest sellers include pricier goods like cashmere sweaters and classic jackets, according to chief merchandising officer Lisa Greenwald. And with most customers still working from home in some capacity, “colleague gifting” has yet to make a meaningful comeback.

The auction site eBay says it’s selling five used watches and three used handbags every minute. “Consumers are actually shopping differently — and taking a more open-minded approach,” Senior Vice President Jordan Sweetnam wrote in October.

At Omaha Steaks, the share of gift sales rose 13 percent early in the pandemic and have continued to climb as families opt for filet mignons, scalloped potatoes and apple tarts in lieu of traditional presents, according to Brian Fowler, the company’s vice president of procurement and product development.

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“People are simplifying the holidays,” he said, noting that the company has added larger gift packages to keep up with demand.

Pandemic-related product shortages and shipping delays have also made it increasingly difficult and expensive to track down popular gifts. Overall prices have risen nearly 7 percent in the last year, according to the Commerce Department’s latest data, and retailers of all kinds have begun raising prices and dialing back discounts in response.

Meanwhile, sales of gift cards — the ultimate practical present — are up 43 percent from last year, according to fintech company Block.

“This year, it’s like, ‘Hey, don’t get me anything for Christmas and I won’t get you anything either,’” said Demi Stratmon, a government contractor who lives in Northwest Washington. “With gifts being more expensive, I’m focusing on the primary people in my life.”

Stratmon plans to spend $4,000 on herself, her parents and boyfriend. But instead of shelling out for designer wallets, shoes and cologne, she’s focused on more meaningful gifts like vacation flights and hand-painted portraits by an artist she found on Instagram.

“It doesn’t feel like you’re getting a bang for your buck on anything this year,” the 23-year-old said. “It makes you want to think hard about what to buy.”

Americans are projected to spend an average $648 on gifts this year, less than they did the last two years, according to the National Retail Federation. All told, the industry group expects holiday spending to climb as much as 11.5 percent to more than $860 billion, though economists say some of those gains will probably be driven by higher prices.

But holiday spending has been a mixed bag so far: In October, when many retailers began rolling out Black Friday deals, sales surged 1.8 percent from the month before. But growth was an anemic 0.3 percent in November as consumers spent more on gas and groceries, and cut back on most everything else. Key holiday categories like department stores, and electronics and appliance retailers posted the sharpest declines, of 5.4 and 4.6 percent, respectively.

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Before the pandemic, Schmidt says her extended family would get together for an expansive gift exchange on Christmas. She’d buy presents for dozens of nieces and nephews, and her three children would go home with bags full of toys, lunch bags and other gifts she’d eventually give away. Last year, when the pandemic upended their plans, she says it was a refreshing change.

“One of the silver linings of not having as many in-person parties is that we’re not getting as much junk,” said Schmidt, who lives in Camarillo, Calif. “There’s not as much pressure to spend money on all kinds of wasteful stuff.”

This year, armed with a shorter-than-usual list, Schmidt finished all of her Christmas shopping in October. She bought clothes, ear buds and gift cards for her two teenage daughters and Legos for her 5-year-old son. She picked up a grocery store gift card for her mother.

“In past years I remember thinking, this is just absurd. We cannot keep doing this,” she said. “It took a pandemic to finally put an end to the excess.”

Shoshanna Teel quit her job as a high school English teacher early in the pandemic to start her own marketing business. Money is tight this year, forcing the 26-year-old to reconsider her purchasing habits.

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“When you fall on unemployment, it makes you put so many things into perspective,” said Teel, who lives in Dallas. “What’s important? What have I wasted money on? Where could I have saved?”

After spending much of the last two years cleaning out her home and donating unused items, she says she has a new understanding of just how wasteful gifts can be. She’s buying air fryers and bitcoin for cousins, and CBD gift baskets for friends. Everyone else is getting cookbooks and gift cards.

“Everything costs more this year and I just don’t have the same enthusiasm to shop,” she said. “Every gift I see, I’m so in my head, thinking, ‘Is this worth it? Do they really need this?’ My whole perspective is so different this year.”

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