Call it the physics of generosity: For every gift given, there is a gift received. 

It is easy to overlook this cause-and-effect, particularly when we’re thinking about the financial impacts of our gift giving ways.  We all know the costs of giving, and many of us are eager to find ways to be financially smart givers. But rarely do we stop to think about the other side of the exchange — namely, the economics of receiving. Short of extracting what we need and want from those giving us gifts – a strategy acceptable only when we’re young, innocent, and utterly adorable – what can we do to come out ahead as gift recipients? 

There are, in fact, smart ways to receive (and use) gifts that can make us better off.  Similarly there are not-so-smart ways that can actually cost us. So before you dash off another thank-you note and assume you’ve done all that’s required to be a good gift recipient, consider the following DO’s and DON’Ts of receiving:

  • DON’T be afraid to request money from family members when asked what you would like as a gift. Americans seem to have an aversion to gifts of green. Many believe exchangeable items or gift cards are more suitable and tasteful. But these money-alternatives can cost us. Balances on gift cards often go unused. Sometimes we never get around to exchanging items and instead toss them in a drawer, or worse, we go to exchange the gift and end up buying something else we had not planned for.  With a gift of money, we can put it to its “highest and best use,” according to our own financial circumstances. What’s more, money is divisible, allowing us to spend some, save some, and even give some away – a principle of good money stewardship espoused by many financially successful individuals.

  • DO make the best financial use of the gift cards you do get If the card comes from a retailer where you never shop, you can always re-gift the card to someone who does. (More on re-gifting below). Or you can give them to charity for a tax deduction. Check with your favorite charities to see if they accept them; otherwise do an Internet search for “charities that accept unused gift cards” to see the many names of non-profits which come up. 

    Another option is to sell or swap your unwanted card on an online marketplace. But be aware that these sites often charge transaction fees or a cut of the balance to the site provider. Knowing about these fees may be exactly the nudge you need to head off the gift cards and ask instead for cash in the first place.

  • DON’T ignore the valuable information a gift to you provides about the giver. Take careful note of who gives you what. Do you always get a book from Uncle Steve, or a gorgeous scarf from Cousin Anita? Chances are that Steve likes to hang out in bookstores, and Anita loves fashion. Knowing this can save you indecision and time –hence, money – when it comes to giving gifts. When we don’t know what people like, we often buy on price alone, and are likely to overbuy, to save face. 

  • DO consider the financial benefit of declining a gift.  We all have situations where gift-giving has become more habit than joy. Maybe you always get a gift for your next door neighbor for no other reason than she always gets you one. This year, what if you went to her and suggested that instead of gifts, the two of you have lunch or tea and spend time with each other, rather than money on each other? Another instance where declining a gift might make financial sense is when you feel obligated (or expected) to spend a reciprocal amount on the giver, but really cannot afford to do so. 

  • DO be aware of the receiving etiquette that may govern the gift.  In some cultures,  t is customary to refuse a gift several times before accepting. Other cultures have expectations as to whether you should open a gift in the presence of the giver.  Elsewhere, the value of the gift you receive might signal the value of the gift you are expected to provide in return.  Know the rules and you won’t find yourself having to spend more money later to make amends.

  • DON’T disdain re-gifting. Few of us will admit to it, but most of us re-gift as a way to save time and money, hoping that we never get found out!  I’d argue it’s important to be a smart re-gifter. For example: Keep track of your gift givers to prevent giving right back to the same person! Avoid recycling one-of-a-kind gifts: Aunt Bertha’s framed oil painting won’t work, whereas bottles of wine or the latest best seller (unread!) will. Also consider bringing re-gifting right out of the closet and making it an occasion. For example, hold a holiday re-gifting party at your firm, where everyone brings a previously received item to give again, thereby saving the costs of the usual Secret Santa gift exchange.

While it’s often said that it is better to give than receive, this doesn’t mean we cannot become better receivers. As we exchange gifts throughout the year, we might consider that smart receiving is just the other side of smart giving.