What can be done about the inefficiencies of giving gifts?

Economists will inevitably talk about the deadweight loss of Christmas gift giving around the holidays. The scrooge who came up with the term, economist Joel Waldfogel, literally wrote the book on the subject. Deadweight loss is the mismatch between what a gift giver thinks a receiver wants and what the receiver actually wants. This, in Waldfogel’s words, “is just the waste that arises from people making choices for other people. Normally I’ll only buy myself something that costs $50 if it’s worth at least $50 to me. When I go out and spend $50 on you though, because I don’t know what you like and what you need, I could spend $50 and buy something that would be worth nothing to you.”

Expanding this concept to the whole economy, a conservative estimate of deadweight loss is 10 percent (that is, the average gift receiver values a gift at 90 percent of its actual value). Given that Americans are expected to spend about $600 billion on holiday gifts this year, that would put the amount of deadweight loss at $60 billion.

What are the proposed solutions for reducing this loss?