This paper examines consumer signaling in gift giving context. Our focus is on the knowledge the gift giver has about the real quality of the gift, and its influence on how much the gift giver would use extrinsic cue, such as warrantee, in gift giving. We argue that consumers’ intrinsic knowledge (about the gifts they buy for their friends) would determine how much they would use extrinsic cue in giving gift. The results should contrast the widely-known case of the buyer-seller context. That is, in gift giving, the higher the intrinsic knowledge the consumers have, the more they would use extrinsic cue. This effect should be more intense when giving gifts to close friends, compared to giving gifts to distant friends. Additionally, we argue that materialism would moderate the relationship between the consumer’s intrinsic knowledge and their use of extrinsic cue in gift giving. The higher materialism personality the consumers have, the more they use extrinsic cue in gift giving.