By Caroline Desrosiers
Black Friday—once an American shopping frenzy, now celebrated worldwide—kicks off the holiday season with eye-popping discounts and doorbuster deals that lure millions into stores and online. But beyond the thrill of bargain hunting and record-breaking sales, there’s a pressing question: are these deals delivering more harm than good?
The allure of Black Friday discounts isn’t just about drawing in customers; it also offers a critical opportunity for businesses to secure their financial success with surging sales. The term “Black Friday” is thought to refer to the phenomenon where businesses put themselves “in the black”, a term derived from bookkeepers using red ink to indicate losses and black ink to indicate profits, with the high volume of sales on this singular day. Reduced prices are only a small part of Black Friday for businesses, as retail-based businesses see a huge spike in sales, which they rely on to meet annual financial targets.
Profits from Black Friday don’t just bolster revenue—they also help businesses tackle another crucial challenge: managing excess inventory. For businesses, Black Friday is a day to clear out older inventory to make room for new products. Overstocked inventory loses value the longer it sits on shelves, but with Black Friday sales, these low-value products are marked down, making them more attractive to potential buyers.
Some businesses also use the opportunity to test new products and collect data. With the high volume of consumers, businesses can get insight into trends in the market. Products that fly off the shelves likely indicate consumer demand in the coming months, and new or unexpected categories that perform well provide insights into emerging trends and shifts in preference.
Black Friday has an overwhelmingly positive impact on sellers with inventory clearance and high revenue levels, but this gain is balanced out by the negative impacts of overconsumption and high levels of waste. A study by Green Alliance estimates that 80% of Black Friday purchases end up as waste after little to no usage. With lower prices for a limited time, consumers are more likely to purchase goods they would otherwise pass on, resulting in this disuse.
In addition to waste, the limited-time deals foster a sense of urgency that encourages impulse buying, leading to purchases that may ultimately go unused. This idea of urgency also leads to overconsumption in the form of impulse buying. Temporary deals convince buyers that not only are they getting a good price on things they would likely otherwise not buy but they are also saving money by purchasing them. These purchases more often go to waste or sit unused after the holiday as the novelty wears off.
The manipulation of consumers doesn’t end with impulse buying. Businesses have been known to inflate the prices of goods prior to Black Friday to make their deals more attractive without actually offering a markdown. This misrepresentation of price occurs most often when products that have been released for a significant length of time are compared to their price at release rather than the more recent price. These actions, while not illegal, trick the consumer into believing the items are worth more than they are, misrepresenting the goods being sold.
As shoppers increasingly move online to avoid crowded stores, Black Friday’s impact has expanded, boosting e-commerce and creating a new set of environmental challenges. Black Friday has historically led to crowded stores, long lines, and empty shelves, leading to many consumers moving online. E-commerce, a hugely-growing market, is more convenient, accessible, and efficient than traditional, brick-and-mortar stores and has the added benefit of helping customers avoid these crowds. Online Black Friday deals have opened a new frontier in consumerism. In 2023 in the United States, Black Friday saw $9.8 billion in just online sales, a 7.5% increase from the previous year. The rise in online sales has driven a surge in shipping demand, significantly boosting CO2 emissions in the period immediately after Black Friday.
Online deals also present another danger: scams and phishing attempts. Black Friday deals are posted by fraudulent websites to get less cautious buyers to put in their card details. They use expected low prices to distract from phony website addresses and sketchy checkouts. The National Cyber Security Centre estimates that £10 million was lost to cybercriminals over the 2022 festive shopping period.
Black Friday serves as a powerful economic driver for businesses and provides consumers with attractive deals, but it also brings considerable downsides. The day’s intense focus on consumerism encourages overconsumption, waste, and the misrepresentation of discounts, which can harm both individuals and the environment. As Black Friday sales increasingly shift online, the prevalence of cybercrime and heightened shipping demands add new risks and environmental costs.
While Black Friday provides valuable economic benefits, its downsides—from environmental costs to consumer exploitation—demand careful consideration and more sustainable approaches. As this shopping phenomenon continues to grow globally, balancing the benefits for businesses with the need for sustainable practices and consumer protection will be key to mitigating its negative impact on society and the environment.
The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.
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