This research examines how gift recipients communicate gift failure to givers, whether through paralinguistic indicators, direct verbal comments, and consumption (or not) of the gift. Critical incident reports identified specific communication indicators that signaled displeasure with the gift and measured the impact of these indicators on important exchange outcomes. Overall, failed gifts have a greater impact on future exchanges than on relationship quality. However, failure to appreciate the gift can have a significant negative effect on relationships. Gift failures between friends, co-workers, and in-laws are more susceptible to relationship harm than those involving close kin, like parents, spouses, and children. © 2006 Wiley Periodicals, Inc.