For most of us, Thanksgiving means gathering with our family to enjoy a meal complete with the traditional turkey, ham, stuffing, and pie. Over the last fifty years, Thanksgiving has meant not only family and food, but also one of the busiest shopping days of the year: Black Friday. Historically, the day after Thanksgiving marks the beginning of the holiday shopping season, and retailers have been pushing it further and further into Thanksgiving Day itself, offering bigger deals for those willing to line up.
If you’re trying to celebrate the holidays on a budget, it’s understandable why Black Friday may seem like a worthwhile way to spend your time. You sacrifice a few hours, maybe wait in a few lines, and save a ton of money on that new entertainment system you’ve been waiting to buy.
There is one catch to the day after Thanksgiving sales. The biggest secret of Black Friday is that it really isn’t the best time to buy. There are better and easier ways for you to save on your holiday shopping, ways that don’t involve you having to get up at 2:00 in the morning to stand in a long line.
Why Is It Called “Black” Friday?
Black Friday originally got its name due to the immense amount of traffic that occurred the day after Thanksgiving. Another take on the history of Black Friday is that it was the day when many retail outlets would first see significant profits; some operated at a loss throughout the rest of the year (in the red, so to speak), and finally moved “into the black” starting the day after Thanksgiving. This isn’t entirely accurate — while some retail stores do depend on Christmas season sales, most stores operate on a profit during every quarter, without a problem.
Neil Irwin of the Washington Post wrote about Black Friday in an article last November, and as Black Friday 2013 approaches it’s worth mentioning again—especially in light of news that Wal-Mart will kick off its deals at 6:00 PM on Thanksgiving this year. Irwin’s results came from a research study conducted by macro-economic research firm Capital Economics, who looked at retail sales during Thanksgiving week and the overall change in sales for the holiday season (that’s from November-January). Their results showed that strong Black Friday sales figures had almost no direct relationship with overall holiday revenue, and in fact predicted slightly weaker season sales. Black Friday being a spike in profits for retailers and a shot in the arm to the economy is a slight exaggeration when compared to the entire holiday shopping season.
So, is Black Friday the Best Time to Buy? It All Depends
So what about those Black Friday deals? Why would stores put on such insane markdowns if it wasn’t going to end up generating a major profit? The fact is that retailers are in fierce competition for your money. If one store decides to open early, the others will quickly follow suit. The amazing deals — like $88 flat-screen TVs, for instance — are usually one-off models, sometimes stripped of certain features or add-ons. It may seem like a great bargain at the time, but when it comes to big purchases like electronics or furniture, you have to gauge the worth over the long term. It’s usually wiser to spend a lot upfront to get something that will last.
Why make the big discounts? It comes down to being a great marketing strategy. The stores are willing to give away the best discounts to the shoppers who line up for hours and even give up a part of their Thanksgiving because those customers are essentially paying the store, and creating publicity and raising anticipation for deals that will drive other customers to the store during the rest of the holiday season.
In the end, unless you’ve done your research and know for sure that you’re getting a once-in-a-lifetime deal, you’re probably better off just enjoying your Thanksgiving dinner and getting a good night’s sleep. You can always take part in American Express’ Small Business Saturday initiative, do your online-shopping during Cyber Monday, or donating time or money as part of the Giving Tuesday charitable campaign.
