The significance of a gift is greater than the utility of the gift-object. Basically everybody seems to know this implicitly, but I needed to work it out explicitly to understand why.
Consider a gift. Call the actual item that’s being given the “gift-object”. The gift-object is the part of a gift that the recipient could acquire for themselves. A gift, then, is a gift-object that’s given from one person to another; a gift-object with a gift-giving.
I’ve misunderstood gifts in the past because I failed to make this distinction; I assumed that the value of a gift is the same as the value of the gift-object. I also assumed that, generally, people understand their wants better than anyone they know. Taken together, these two assumptions make gift-giving a waste of time. This second assumption might be reasonable, but the first assumption is not.
A gift has effects beyond the utility of the gift-object, because it is also a mnemonic token of the gift-giving. If I have a treasured gift, given to me by someone I care about, then the gift reminds me of that person.
Notice that how well this works is dependent on the frequency of use of the gift. Use a gift too often and the gift-meaning fades into a sea of other associations with the gift-object; use it too rarely and the gift-meaning is rarely recalled, and eventually fortgotten. The way you feel about the gift is also dependent on the way you feel about the gift-object; enjoy it well, and you’ll garner good will for the gift giver.
Moreover, a gift is an indication of how well the giver understands the reciever. To give a highly effective gift, the giver must understand what the reciever will enjoy at a reasonable rate.
So, beyond their use as gift-objects, gifts have an additional evocation of the memory of another. Successful gifts are tokens of the relationship between the giver and recipient.