Closing Gifts (Applies to anyone in sales)

 

CLOSING GIFTS
By Jim “Gymbeaux” Brown, September 24, 2026

BACKGROUND: I retired from the real estate business in 2012 after 33 years in the business. One question that continually surfaced was “closing gifts” for customers. Do you engage in the practice or not? If you engage, how much do you spend? Do you know how much the Internal Revenue Service permits you to deduct on your income tax return identified as closing gifts to customers? Obviously, I have been out of the business for over 13 years and things change but I was shocked to discover that the IRS has NOT changed the amount for at least that length of time even though the cost of everything has gone up and not down. 

To be honest, it is exceedingly difficult, if not impossible, to purchase a closing gift worth less than the IRS limit of $25.00 that has the desired meaning for giving such a gift to your customers. According to ChatGPT, here is a summary of the IRS rules extracts in September of 2026:

“The IRS generally allows you to deduct up to $25 per customer, per tax year for business gifts.

For example, if you are a real estate agent and give a customer a $100 gift basket at closing, you can generally deduct only $25 of its cost.

The $25 limit applies to the total gifts you give the same customer during the year, not to each individual gift.

There are two useful exceptions:

·         Packaging and shipping: Gift wrapping, engraving, and shipping may be deductible in addition to the $25 if they do not increase the gift's value.

·         Promotional gifts: Items costing $4 or less, permanently displaying your business name and widely distributed, generally don't count toward the $25 limit.

Keep receipts and records of the recipient, date, and business purpose.”

What can you give to a customer that would serve the purpose of keeping you and the service you provide ever present in their mind. Here are some negative things about closing gifts that I have observed over the years.

Flowers – they typically die quickly.

Plants – some succeed and some do not. If the customers eventually plant them in the ground, they remain with the house even after the customer may have sold it and therefore would serve no future purpose to keep your name ever present in their mind. If the plant dies that would be a negative reminder.

Meals. You can get a delicious meal, or you can get a bad meal. Customers may temporarily remember a delicious meal but for how long. I can assure you that they will remember a bad meal and whoever gave it to them for an extraordinarily long time. Meals have no shelf-life after the customers eat them.

Where am I going with this Nugget? Do I believe in closing gifts or not? I do believe in not only using closing gifts but also giving gifts of thanks in general. Why are closing gifts and gifts in general important for your business?

I will answer the last question first. They are NOT important to you and your business IF the closing gift turns out to be a bad gift OR the gift has no shelf life. By “shelf life” I mean, will the gift be around long enough to remind the customer of you and your service the next time the need arises? For most closing gifts the answer is no, they will not. If that is the case for the gifts you give, you may want to consider saving your money or changing your gift. As to the importance, you want the closing gift to have a shelf life with a positive memory and more importantly, whenever the customer sees it, the gift reminds them of you, the service you provide and how professionally you provided the service. Using real estate sales as an example, you want your gift to broadcast the message, “When YOU think of REAL ESTATE, you think of (insert your name)! If you currently give a closing gift, does the gift serve that purpose? If not, you need to rethink what you are doing and how you can do it better.

I would not write this Nugget if I did not think I had a better idea for people in sales to use and I do. Why? Because I know that it worked for me. First, you MUST eliminate the restrictions that the Internal Revenue Service has placed on you regarding the amount you can deduct as a business expense on your tax return. That restriction will significantly hamper your goal of helping the customer to remember you and the service you provided to them. Take whatever deduction you can and move on! Having someone remembering YOU and the SERVICE that YOU provide is far more important and is PRICELESS!

What checked the biggest box for me was giving people something that most people would want to keep and if they kept it, it would serve my desired purpose, being remembered! I purchased a box of note cards, the kind you would or should be using to write personal notes to probable customers and people you do business with. The cards I purchased had a pen and ink drawing of famous landmark type buildings located in the town I served, Slidell, Louisiana. By most city standards, Slidell would be a small town but even a small town with several memorable and iconic buildings.

I worked out an arrangement with a local art/frame store where they would mount three of the cards onto a colorful background, (I chose a simple solid blue felt like background) and then the store would frame them and cover them with glass. On the back of each creation, the store applied the brown paper that you see on all artwork like the one created for my customers. It was a beautifully finished product if I may say so myself. But…I was not done. I authored a poem, an original poem that I unfortunately have lost. The poem told the story about making a house a home (there is a difference). The premise was that a “house” just sits there until you insert a family and then it becomes a home where memories are created. I would take a Sharpie pen and copy the poem in my own handwriting on the back of each picture and then sign it.

Now, as the infamous radio announcer Paul Harvey would say at the end of each broadcast, “And now for the rest of the story!”

This is what happened and I swear as unbelievable as it may sound, it is just as I describe it. I do not recall any customer who received one of these works of art, never being extremely thankful for the gift. I have personally been in the homes that I had sold to customers who received the gift and it was still hanging on the walls within their home that they bought thirty or even forty years ago. They have told me that every time they notice it, they think of our sale together. That IS PRICELESS!

You can believe what I am about to tell you or not, that is your choice. I received a call from a woman who I had given one of these frames to and this is what she told me over the phone. “I was looking at the three cards, and I remembered that you wrote something on the back. I remembered that it was a nice thought when you gave it to me, but I had forgotten about it until this past week. I took the frame down to read what you had written, and it made me cry because it struck an emotional chord. I cried a lot and (as she said, here it comes) the tears dropped down on the back of the frame sitting on my lap and the ink ran and ruined what you had written. Can you send me a copy of the poem?”  That happened just as I had explained it. The actual words may have been different, but the message is the same. After all, this happened over thirty years ago so please do not fault me for not remembering the exact words she said. Due to a major computer crash, I lost the original poem I had written.

How much did the frames and cards cost? Great question. I think I may have spent $15 to as much as $25.00 on the box of cards but I do not remember how many cards were in the box. I did not consider the cost to be excessive. As I stated, I worked out an arrangement with the art store that they would get repeat business from me every time I closed a sale and they could put the name of their company and contact information on the back so it was a form of advertising for them and a business deduction for them as well. I do not remember the price we settled on but I remember it was less than $100 for each piece. It was more like $75.00. Keep in mind, I could deduct $25.00 on my income tax so that may the difference in the real cost to me was more like $50.00. Was spending $50.00 worth giving a customer something they would keep for life and that every time they saw it, they would think of me? Is a Giraffe afraid of ceiling fans!

If you could find something like the cards that I had discovered, you could do something similar. You could also save money by framing just ONE of the cards and making the item smaller and therefore much easier for the customer to find a place to hang it.

What did the finished product look like? This is one of the pieces the frame/art store made for me, and it still hangs on my wall as well.