So here are the numbers: it’s predicted that we, the British nation, have given around £1.1 billion worth of unwanted presents to each other over yuletide. That’s the GDP of Malawi in unfortunate scents, ugly underwear and unforgivable bad taste. These unpleasant gifts are often referred to as “pressies” by the sort of people who also use the word “Crimble” and listen to Stockings by the Fire Christmas medley CDs from Starbucks. They must be stopped.

Just pause to consider the economics. I refer, of course, to the learned journal The American Economic Review, December 1993, pages 1328-1336. (Who says that I sit around drinking coffee all day at the library now?) This article, “The Deadweight Loss of Christmas” by Joel Waldfogel, explains that although Christmas spending boosts the national economy, at a personal level, gift giving is often a waste.

Well, we knew that. But Waldfogel explains that the best a gift-giver can do with, say, £10 is duplicate the choice the recipient would have made. Usually this goes wrong, and then, “It is more likely the gift will leave the recipient worse off than if she had made her own consumption choice with an equal amount of cash. In short, gift-giving is a potential source of deadweight loss.”

In a survey, Waldfogel finds that holiday gift-giving (he includes Hanukkah) destroys between a tenth and a third of the value of gifts. The deadweight loss of Christmas is in the billions. There are many graphs to prove this. But there’s an upside. Apparently, gifts from friends and close family are more efficient – because they know your tastes – but “non-cash gifts from members of the extended family are least efficient and destroy a third of their value”. Any time there’s a big age difference between giver and receiver, there is deadweight loss, too, usually featuring ill-fitting fluffy slippers.

Worried? Waldfogel knows what to do: “I develop a simple expected-utility model to explain the decision to give cash, as opposed to in-kind gifts.” Or as we non-economists say: “Grandpa, just send me the bleeding tenner, OK?” What puzzles Waldfogel is why everyone doesn’t just give wodges of money. He is aware there may be “stigma” attached to cash gifts. (Like giving your boss a fiver instead of a half-dead poinsettia.) And oddly, the stigma has “dissipated where it would be most destructive: grandparents, aunts and uncles are most willing to give cash”.

The British Retail Consortium says Britain has spent £10.9 billion on presents this Christmas, so even if a tenth of gifts are unwanted, that’s more than £1 billion flushed away. But what if it’s a third? Yes, £3.6 billion wasted. It makes a person feel quite queasy. I understand and indeed enjoy this celebration of abundance in the darkest days of the year, but we need a sense of proportion.

New year is a marvellous gift-free celebration, and every time I’m invited to Thanksgiving dinner by American friends, I always think this is how Christmas should be: an epic session of gastronomic hoggery enjoyed with family and friends, and some serious thanking. But I’m not going to be able to sell that to those still on the Santa side of the divide…

So if unwanted presents are unavoidable, what to do? The charity shop is easy, as is recycling the gift to the giver next year as punishment. But you can make more for charity if you sell gifts on eBay. If this sounds too time-consuming, any small child of your acquaintance should be able to set up an eBay account for you, download photos of your unwanted items, and take ten per cent of the profit. (It’s amazing how good the child’s previously erratic maths becomes.)

Another solution is to claim you have been burgled, down to the last pair of novelty socks, which you then bury for future archaeologists in the garden. If you’ve been sent inappropriate or dull literature, you can also stage a book-burning to shock the neighbours. One friend suggests travelling round car boot sales in early January and sneaking things on to the stalls – or doing your own sale, a decent distance from home turf. My favourite disposal technique: leave the Offending Thing on the street and watch from the window, taking bets on who will take the bait as they walk by. (Tip: it’s always well-dressed ladies of a certain age, or kids.)

Next year you may wish to consider a solution I favour at home: the “reverse gift”. Reverse gifts are presents you need, want and love, so you present them to your close family and friends and then borrow them constantly. Tickets to a concert or play that you particularly like are also a sneaky way of giving and benefiting, and magazine subscriptions are great: that’s why my husband got a year’s-worth of Scottish Islands Explorer for Christmas. And there’s nothing like borrowing someone else’s freshly filled iPod, is there? Saves such a lot of bother.

kate.muir@thetimes.co.uk

Times recommends

• Live chat: Thrifty ways to update your winter wardrobe
• Is anybody out there really listening?
• Nutrition Q&A: Will eating late make me fat?