Black Friday is the official kickoff of the holiday shopping season. Or at least it used to be.
Retail's biggest day has been slowly diluted over time as the holiday shopping season has crept further and further into November.
There are definitely deals to be had, but often shoppers are better off staying at home on Black Friday. In this video from our YouTube channel, we break down how consumers overspend on Black Friday and what items you should stay away from if you're shopping the sales.
Narrator: Hi and welcome to The Motley Fool's Bottom Line series. In this episode we're talking about Black Friday and whether the shopping day is actually a good thing for consumers and stores, and which items you should be wary of buying on America's biggest shopping day of the year.
Last year, Black Friday was the biggest day of retail sales in the U.S., with consumers spending 121% more than they do on an average day.
Clothing in particular is in demand on Black Friday, with sales jumping 246% higher than on an average day of spending.
But over the years, the importance of Black Friday has shifted a bit, as more retailers have started to offer deals much earlier in the shopping season than before.
Which is why it's helpful to take a look at sales from all of November and December to get a better picture of just how big the U.S. holiday shopping season is.
This year, the National Retail Federation estimates that holiday retail sales during these two months will be about $729 billion, which is an increase of about 4% from 2018.
When you break that down by individual consumer spending, the average U.S. consumer will spend about $1,047 this holiday season.
With all of this spending being spread out over two months, the importance of Black Friday has faded a little.
And not all stores benefit from the massive shopping day. Smaller malls that have lost some of the bigger anchor stores and don't get a lot of foot traffic to begin with, probably won't see a huge boost from Black Friday shopping.
And the data suggests that Black Friday may not be all that it's cracked up to be for consumers either.
Nearly 48 million Americans are still paying credit card debt from last year's holiday shopping season.
Unfortunately, more than 60% of U.S. shoppers have already felt pressure to overspend on gifts and travel this year.
Cutting off all holiday gift buying may be too drastic for many Americans, but there are a few items and Black Friday sales that you should wary of.
The first one is toys. Generally speaking, toys go on sale closer to Christmas Day, rather than earlier. So if you see Black Friday deals for some of this year's hottest toys, it may not be the best deal you can get this holiday season.
TVs are also a popular item for Black Friday, but many times the models being sold are either older or not name brand. These TVs may be of lower quality than you expect. So if you find a Black Friday TV deal from a brand you've never heard of, keep in mind it might not be a purchase you'll be happy with a year from now.
Additionally, if you're looking to buy a new gaming console, you may want to wait. New versions of Sony's (NYSE:SONY) PlayStation and Microsoft's (NASDAQ:MSFT) Xbox are coming out later next year. You may be able to get a good deal on current versions now, but just know that a newer one is right around the corner.
Finally, any deal where you have to submit a mail-in rebate may be a good one to skip. It's easy to forget to submit your rebate, especially during the holidays, which means you may end up paying full price for something, when you thought you were getting a good deal.
As you shop this holiday season, remember that setting a budget and sticking to it is one of the best ways to keep yourself from overspending.
Also, do your homework to make sure that any deal you think you're getting is in fact a good deal. Do some basic comparison shopping and don't be sucked in by a low price tag.
Finally, remember that it's easy to get caught up in all of the shopping and forget that spending too much money this holiday season will likely just add to your credit card balance, without adding much to your overall happiness.