Given the significance of the gifting industry- the National Retail Federation reports that Americans were forecasted to spend 18.9 billion dollars on Valentines’ Day gifts in 2015, we model the impact of gift-giving on customer buying behavior using two Type I Tobit models. We address the following research questions with individual level transaction data that spans seven years from a large national retailer:

1. How are past personal spending, gift spending, and gift-receiving related to future gift spending?
2. How are past gift spending and gift-receiving related to future personal spending?
3. How do past gift behaviors moderate the relationship between past personal spending on future personal spending and future gift spending?

Our findings have strong managerial implications in terms of whether and how firms should encourage gift-giving. By understanding the financial implications of customers’ gift behaviors for the firm and which customers are most likely to engage in gift behaviors, firms can better communicate with their customers to encourage future spending.