Boxing Day and Responsible Consumerism
Written by: Shehan Perera and Junayd Hussain
The History of Boxing Day
Boxing day likely evokes fond memories of massive discounts and indulgent shopping sprees. It is a happy day for both shoppers and retailers. In spite of the massive discounts enjoyed by shoppers, Boxing Day is one of the most profitable events of the year for many retailers. However, Boxing day may have far more charitable and altruistic origins than its present form would suggest. While it is still debated to this day, one of the oft-cited potential origins for boxing day is the Feast of St. Stephen celebrated on December 26th by Western Christian churches. Centuries ago, as part of the feast celebrations, Christians would distribute alms to the poor. This likely morphed into the British practice of gifting “Christmas boxes” (small cash gifts) to tradesmen and servants. This is likely the etymological origin of the present sales holiday.
Nowadays, boxing day is far less focused on giving and charity. The only bit of charity that can be associated with the holiday today is the generous discounts offered by stores across Canada and America. Additionally, “Boxing Day” is no longer just a day but is instead a week or more as the sales associated with the original holiday is now extended to weeks beyond the 26th to maximize profits.
Unfortunately, the holiday’s present form is problematic as it can exacerbate money issues and by its nature may encourage irresponsible spending by creating a feeling of never being able to buy something you desired if it goes off sale. There are many other impacts of boxing day apart from this and even though the holiday has passed, it would be best to be aware of dangerous spending habits and learn how to identify and curb them.
Impacts of Boxing Day
The economic impact of boxing day cannot be understated. For many businesses, boxing day (and the associated period of sales) compose the most profitable period of the year. This is despite the massive price cuts businesses employ to attract customers during the winter holiday season. More recently, it is highly likely that many retailers suffered heavy losses this year due to the restrictions put in place to combat COVID-19 which severely limited in-person shopping except for essentials. Additionally, the pandemic has brought on a significant increase in online shopping and this shift may have also impacted in-person retailers.
There are some potential negative health consequences associated with boxing day sales though. Considering that most popular retailers are in large malls with food courts, the extended shopping hours seen during boxing day sales increases the likelihood of consuming fast-food present in the malls, which is often unhealthy in a variety of ways (high sodium, fat, cholesterol, etc.). While the lasting effects of this one episode of unhealthy consumption are likely minimal, they do exacerbate a problem that many people have of overeating during the winter holidays.
From a mental health standpoint, boxing day sales encourage overindulgence. This makes this holiday potentially dangerous, from a personal finance standpoint, for people who have low inhibition. They are more vulnerable to overspending and may seriously damage their personal finances by taking part in the sales boxing day brings.
How to be a responsible consumer?
I should note that nothing in this entire article constitutes professional financial advice. You should seek help from a professional for such advice. Instead, we will focus on identifying irresponsible practices and perhaps some measures we think you can take on your own to help.
2 key indicators of irresponsible consumer behavior are impulsive buying and failure to save money. These often go hand and hand so let us go with potential strategies for addressing these.
Firstly, start budgeting for whatever spending activity you are going to do and only take that amount of cash with you. For example, if you need to get groceries, make a list, set aside enough money to cover only the items on the list, and then ignore everything but those items. Limiting how much money you have on your person prevents you from impulse buying as you need to buy just your groceries. This also helps you avoid abusing your credit card to buy products without limits.
Another piece of advice is to work with your bank to set spending limits on your cards. Parents often do this for their kids to prevent them from abusing it. This artificially introduces a barrier to excessive spending that will help keep your behavior in check but will also help you identify when it is too much. Speak to a financial adviser and your bank about specifics for this.
Irresponsible consumers often lack savings. I once attended a talk given by Gordon Stein (author of Cashflow Cookbook) about saving money and was surprised to learn that most Canadians only put small portions of their paycheques into their savings and instead spend most of it. This is backed up by the fact that most Canadians live paycheque to paycheque. To avoid this, save larger portions of your paycheck so that you’ll have some money available to use if you suddenly lose your job, or are out of spending money that you budgeted and need to buy something essential. This is not a professional endorsement, but Stein’s book Cashflow Cookbook is a good place to start learning saving strategies. However, always consult with a professional before making any major decisions about your finances. Following this, predetermine how much of your paycheck you will set aside for spending, paying expenses, savings, etc. Banks will often cooperate to immediately take your paycheck and deposit part of it into your savings and the rest may go to your chequing account or to paying off any outstanding debts.
Boxing day is awesome. There are great deals and not only do responsible consumers get what they want for less money, but retailers also make a great profit. A veritable win-win situation. Unfortunately, irresponsible spenders are in danger during boxing day, Black Friday, and other such events. They can seriously damage their lives and future by overspending, losing the trust of a bank through failure to pay back credit cards, etc. If you impulsively buy and/or lack disposable income despite holding a well-paying job, then seek financial advice to help you correct your bad habits.