True Cost of Holiday Season Spending

• Holiday spending globally is projected to reach 1.3 trillion USD in 2023, defying economic concerns.
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• Christmas leads as a key retail holiday, complemented by exclusive sale days from e-commerce platforms like Amazon and Flipkart.
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• Retailers use strategies like time-limited deals and emotional advertising to encourage more spending during the holiday season.
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• However, the holiday season can lead to overspending, heightened by the festive atmosphere and aggressive marketing.
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• With the preference for online shopping, risks such as cyberattacks become more prevalent.
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• To ensure safe online shopping, it’s advised to use trusted websites, employ a VPN (or a VPN router for your home) for secure connections, and use secure payment methods.

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The festive season is traditionally a time for appreciation, celebration, family—and, almost inevitably, big spending. 

In a recent study, the accounting firm PwC discovered that consumer spending typically surges during the festive season. Even with concerns about inflation, the firm estimates that global holiday spending this year will soar to 1.3 trillion USD this year—a significant increase from the 1.14 trillion USD predicted in 2022. The report also points out the substantial spending habits of U.S. consumers, who accounted for about 270 billion USD of that total last year. 

With these astronomical figures in mind, we decided to explore the impact of various holidays on spending patterns. While Black Friday and Christmas are well-known shopping days in the U.S., what about other, lesser-known holidays worldwide? How does spending on these occasions compare?

Let’s find out.

Jump to…

Infographic: How much do people spend worldwide during the holidays?
Gift-giving or wallet-emptying?
New year, new splurge
From Diwali to Singles Day and beyond
Understanding the holiday spending surge
Avoiding the pitfalls of excessive holiday spending
Checking out with care: 6 ways to protect yourself when shopping online

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Infographic: How much do people spend worldwide during the holidays?

We examined a range of globally celebrated cultural, religious, and retail holidays, focusing on the average amount consumers typically spend during these events:

Biggest annual retail holidays

Holiday	Period	Region (primarily)	Average spend (USD)*
Back-to-school shopping	January – February and August – September	Worldwide	$890 per household
Lunar New Year	January – February	Asia	$300 per person
Valentine’s Day	February	Worldwide	$176 per person
Super Bowl	February	North America (U.S.)	$115 per person
Mother’s Day	March/May	Worldwide	$274 per person
Easter	March – April	Worldwide	$192 per person
Father’s Day	June	Worldwide	$180 per person
Afterpay Day	August	Australasia (Australia and New Zealand)	$93 per person
Flipkart Big Billion Days	October	Asia (India)	$110 per person
Amazon Prime Day	October	Worldwide	$57 per order
Halloween	October	Worldwide	$109 per person
Singles’ Day (11.11)	November	Asia	$38 per order
Diwali	November	India	$120 per household
U.S. Thanksgiving	November	North America (U.S.)	$100 per person
Black Friday	November	North America	$430 per person
Cyber Monday	November	North America	$218 per person
El Buen Fin	November	North America (Mexico)	$60 per person
Christmas	December	Worldwide	$1,000 per person
Kwanzaa	December	North America (U.S.)	$77 per person
New Year’s Eve	December	Worldwide	$115 per person

 

*Spending amounts listed are for U.S. consumers, except for Lunar New Year, Afterpay Day, Flipkart Big Billion Days, Singles’ Day, Diwali, and El Buen Fin.

Gift-giving or wallet-emptying?

A recent study by the National Retail Federation reveals a striking figure: the average American consumer spends around 1,000 USD on Christmas gifts and related holiday items each year, such as trees, ornaments, and food. Notably, over 60% of this budget is dedicated solely to buying gifts.

The average american consumer spends around 1,000 usd on christmas gifts.

To give a clearer picture, here’s a detailed breakdown:

However, this spending trend isn’t the highest globally. Research conducted by WorldRemit, a specialist in foreign exchange and international money transfers, indicates that in 2022, households in Canada and Germany outspent their American counterparts during the Christmas season. This is expected to continue in 2023, with those in Canada and Germany spending more:

New year, new splurge 

Holiday season spending isn’t just about the festive period. For retailers, the season continues as long as shoppers keep using their credit cards. The advent of the new year marks the beginning of a new wave of spending, with Lunar New Year and Valentine’s Day sales dominating January and February.

Earlier this year, following China’s lifting of pandemic-related travel restrictions, a staggering 308 million people traveled domestically during the Lunar New Year period. This led to 52 million USD in spending. E-commerce platforms also saw a significant uptick in activity. For instance, JD.com reported a 171% increase in orders on the eve of the new year compared to the previous year.

In the U.S., the Super Bowl’s influence on retail is unmistakable. In the lead-up to the game in February, sports enthusiasts typically spend around 115 USD on team merchandise, party essentials, and decorations. A study by LendingTree, an online loan platform, highlights an interesting trend: fans are increasingly splurging on new electronics like sound systems and streaming subscriptions to enhance their watch party experiences. These additional expenses significantly increase the annual expenditure associated with the event.

Valentine’s Day, often dismissed as a Hallmark holiday, has evolved into a major commercial occasion. The average American spends about 176 USD on gifts, dining out, and other activities to express their love and affection. This surge in spending is fueled by societal norms, aggressive marketing strategies, and the desire to make meaningful gestures for loved ones.

From Diwali to Singles’ Day and beyond

Diwali, one of the most important festivals in India, isn’t just a festival of lights but also a time of heightened consumer spending. Families gather to light lamps, exchange gifts, and savor festive food, often splurging on new clothes, jewelry, and home decorations. This spending surge is tied to Diwali’s symbolism of renewal and new beginnings. Retailers, recognizing this trend, entice customers with special deals and discounts, which can further fuel spending.

Singles’ Day, also known as 11.11, originated from Alibaba in China and has since become an international retail juggernaut. Celebrated on November 11, it transcends relationship status, encouraging all to indulge in self-gifting and online shopping. What began as a celebration of singledom has morphed into a colossal shopping spree. Retailers offer significant discounts on a plethora of items, from electronics to fashion, making 11.11 a formidable rival to Black Friday and Cyber Monday in sales volume.

Spurred by 11.11’s success, Southeast Asia has seen the rise of similar “double-day” sales events, including 10.10, 12.12, and 1.1. Hosted by popular platforms like Lazada, Shopee, and Zalora, these events mirror 11.11’s format, offering massive deals and drawing eager consumers.

These shopping festivals highlight the growing purchasing power in Southeast Asia and the innovative strategies e-commerce platforms employ to meet consumer demands.

In parts of South America and Mexico, El Buen Fin has emerged as a preferred shopping holiday, coinciding with other global sales events like Black Friday and Cyber Monday. In 2022, El Buen Fin raked in 1.4 billion USD from online sales, with an average spend of 60 USD on every transaction, as retailers offered attractive discounts to draw in shoppers.

The psychology of holiday spending

What drives us to spend more during the holiday season? Beyond the obvious allure of festive cheer, neuroscience offers a compelling explanation. Studies have shown that shopping can trigger the release of dopamine, a neurotransmitter associated with pleasure and reward in the brain. This dopamine rush can be particularly intense when anticipating a reward, such as snagging a good deal. A Journal of Consumer Psychology report highlights how dopamine not only enhances the shopping experience but also creates a feedback loop, making consumers eager to relive the thrill, and driving them back for more purchases.

The thrill of snagging a bargain also plays a significant role as well.The Association for Consumer Research (ACR) discovered that the excitement of getting a good deal not only feels good but also boosts self-esteem. This sensation, known as “ego-expressive,” embodies feelings of pride, intelligence, and competence.

Whether it’s a few bucks off your favorite pair of jeans or a gift with a purchase, the satisfaction of saving money–or the illusion of it—is universal, and retailers know this. This is evident in mega shopping events like Black Friday and Cyber Monday in the U.S. and Canada, and Singles’ Day (11.11) in Asia. Major e-commerce players and brands, including Amazon, Sephora, Nordstrom, and Walmart, now host their own sales events.

It’s no secret that the holiday season brings us joy, happiness, and nostalgia as we celebrate with our loved ones. Emotional advertising is another powerful tool in the retailer’s arsenal. Ads often portray idyllic holiday scenes—happy families unwrapping gifts, children delighting in new toys—evoking emotions that compel us to replicate these perfect moments. A study found that happiness and nostalgia significantly influence gift-buying behavior, making these emotional appeals especially potent during the festive season.

Beyond advertising and emotional triggers, there’s considerable societal pressure to partake in holiday festivities. The custom of reciprocating grand gifts adds to this pressure, often leading to increased spending.

Retailers also use a variety of tactics during big holiday sales events like Black Friday to encourage consumers to spend more money. One common strategy is to create a sense of urgency by offering limited-time deals or emphasizing that supplies are limited. Retailers may also offer exclusive discounts to customers who sign up for their email lists or loyalty programs. 

Brick-and-mortar stores also tend to use the bait-and-switch tactic, where they advertise a deeply discounted product to draw customers in, but then try to sell them a more expensive item once they’ve entered the shop. Additionally, some retailers use doorbusters, which are deeply discounted items that are only available for a limited time or in limited quantities, to create a sense of excitement and encourage shoppers to buy quickly.

Avoiding the pitfalls of excessive holiday spending

The immediate thrill of securing a bargain can overshadow the long-term implications of excessive spending. This behavior not only strains our finances with increased debt and depleted savings but also intensifies the challenges posed by an inflationary economy, where the cost of everyday living is already escalating.

To counteract this, it’s important to recognize impulsive buying and sales tactics and strive to shift towards mindful shopping instead. Mindful shopping involves being aware of the psychological triggers retailers use and consciously deciding what, when, and how much to purchase. It’s about recognizing the difference between “want” and “need,” setting a realistic budget and sticking to it.

By adopting a mindful approach, you not only protect yourself from the financial hangover post-holidays but also find more satisfaction in your purchases. Another way to protect yourself this festive shopping season is to be vigilant against those who are trying to dupe you out of your hard-earned cash.

As the festive season approaches, the preference for online shopping is clear. The U.S. National Retail Federation reports that 58% of shoppers turn to online platforms for their festive purchases. With this significant shift towards digital storefronts, prioritizing cybersecurity is essential. The convenience of online shopping brings with it the heightened risk of scams and cyber threats, particularly during peak retail periods like the holiday season, with cybercriminals exploiting the surge in online traffic. 

Being aware and taking proactive steps to safeguard your online transactions is more important than ever.

1. Only shop on trusted websites 

Before committing to an online purchase, always verify the website’s URL and security certificate. Look for “https://” at the beginning of the URL and ensure the site has a valid security certificate. HTTPS encrypts your data, safeguarding sensitive information like bank details and credit card numbers.

2. Learn to spot the signs of a fake website

Fake websites surge during big holiday sales events, so it’s important to be able to identify the red flags of one. These fraudulent sites mimic legitimate retailers to scam consumers. Here’s how you can spot and avoid them:

• Check the URL carefully: Fake sites often use URLs that look similar to genuine retailer websites but may include small typos or different domain endings (e.g., .net instead of .com).
• Look for trust seals: Legitimate sites often display trust seals like VeriSign or McAfee. However, ensure these are not just images but clickable links that lead to a verification page.
• Examine the site’s design and language: Poorly designed websites with grammatical errors and low-quality images can be red flags.
• Verify contact information: Legitimate sites usually have transparent and verifiable contact information, including physical addresses and phone numbers. Be wary of sites that lack this information or provide only email contact.
• Read customer reviews: Look for website reviews on trusted third-party platforms. A complete lack of reviews or overwhelmingly negative feedback can indicate a fake site.

3. Utilize a VPN 

A VPN can be a valuable tool during sales events. It not only encrypts your traffic and hides your IP address, so the site won’t be able to identify you, but it can also lead to savings due to price variations across different regions. While VPN apps protect individual devices, a VPN router—such as Aircove by ExpressVPN—extends this security to all devices in your household, including those that don’t support VPN apps, like gaming consoles and smart home devices.

4. Be wary of deals that are too good to be true

During the holiday season, it’s typical to encounter a plethora of eye-catching online deals. An iPhone discounted by 500 USD? Yes, please. 

But before you click ‘add to basket,’ exercising caution. Deals that seem extraordinarily favorable are often deceptive. The holiday season’s spike in online shopping activities creates a prime opportunity for scammers to lure unsuspecting consumers. They often use unrealistically low-priced offers to entice shoppers into divulging their personal and financial information.

5. Read the retailer’s return policy

Before you make a purchase, read the website’s return policy. This will help you to understand what your options are if you’re not satisfied with your purchase. Some return policies, for example, exclude items like discounted, custom-made, or perishable items. Some websites also charge a restocking fee for returned items. Typically, this fee is a percentage of the purchase price of the item.

6. Use a credit card or payment service that offers buyer protection

Using a credit card or a payment service that offers buyer protection is one of the best ways to protect yourself from scams and fraudulent purchases during the festive season. Certain credit card companies have policies that could protect you for various reasons. For example, if you buy a product from a website or company that goes out of business before you’ve received the product, you can file a chargeback dispute with your credit card company to get your money back.