We investigated how the costs and benefits of telling a lie affect a person who is lying in an attempt to avoid punishment. One hundred and sixty-eight college students were asked to read three scenarios in which the protagonist gave an excuse for arriving late to an appointment. Excuses given for arriving late were: an incredible lie (a lie invoking an unlikely event as an excuse), a credible lie (a lie invoking a plausible event as an excuse), and the truth. Participants then rated the perceived degree of benefit (forgiveness and impression) and the behavioral and emotional costs associated with each excuse, and finally chose the “best” excuse for avoiding punishment. The incredible lie was ranked highest in terms of costs and benefits, the credible lie received moderate ranking, and the truth received the lowest ranking. Participants tended to choose the credible lie, ranked moderately in terms of costs and benefits, as the “best” excuse. The results suggest that people do not act to maximize benefit but rather to avoid high cost when making an excuse to avoid punishment.