Is that standard practice in this situation? Why should he get a ring when he wasn't on the team in the playoffs?
Don't know if it's a rule or just standard practice but generally if you were on the roster for X amount of games you're entitled to a ring. Doesn't matter where you wind up. It's his if he wants it.
This suggests there could be both a formal rule and a discretionary one:
There's no NBA policy mandating a ring for players not on the roster by midseason; that decision would be up to the Cavaliers' front office. But, if offered, Varejao told the Cavs he would no accept the ring out of respect for his Warriors teammates, Amico's report said.
To me, that suggests that there may be a rule mandating rings in certain circumstances if a guy is on the roster mid-season?
So I guess the NBA pays for rings for the players (
according to this 1985 article), and
back in 2011 Mark Cuban stated there's a limit on how much the NBA will spend on their rings after his players wanted rings that cost $150k-$200k. Although then you have
this ESPN article where Cuban claims he spent $1.4m on rings that cost $40k (so that equals 35 rings), and he even gave rings to former players who still work for the team like Rolando Blackman (community relations), Brad Davis (radio commentary) and Derek Harper (tv commentary).
So my guess would be the league has some rule that says either, they'll buy rings (up to a certain price) for X members of the organization, or that they'll spend $X total on rings, and it's up to the team on how they'll distribute them (i.e. the league will spend $500k on rings, so the team can get 20 rings that cost $25k, or 25 rings that cost $20k, etc.). Though I believe in many cases the owners will pay to get more or nicer rings for those within the organizatio, and can choose to give the janitor a ring if they want. Also I believe there's often at least 2 level of rings for those generous owners like Cuban. The players, coach, GM, probably get the expensive rings that cost $40-$50k, and the rest of the organization (like the video coordinator, marketing director) get much less expensive rings.
While nothing wrong with Varejao's decision, the better PR move is to take the ring and then immediately auction it off to charity or give it to the stereotypical poor disabled super fan that Varegjao spent time visiting in the hospital while with the team.