The day after Thanksgiving is one of the most important spending events in the U.S.
Called “Black Friday,” retailers incentivize shoppers with big in-store and online holiday sales.
The tradition is an important part of many Thanksgiving celebrations and has darker origins than you might expect.
It’s widely accepted that “Black Friday” is the day a store will go “into the black” and become profitable after a year of operating at a loss “in the red” (retailers used to record losses in red and profits in black).
Although this is the official story on the beginning of the Black Friday tradition, it’s incorrect.
The origin of the name actually goes back to the Panic of 1869.
Two notoriously unscrupulous Wall Street financiers, Jim Fisk and Jay Gould, collaborated on purchasing as much of the nation’s gold as possible with the intent of sending gold prices soaring so they could sell it for huge profits.
The conspiracy unraveled on Friday, Sept. 24, triggering a panic that sent the stock market into a free-fall and bankrupting everyone from farmers to Wall Street barons. The day became known as Black Friday.
Now in recent years, another even darker myth has emerged claiming that Black Friday originated in the 1800s. This story recounts that Southern plantation owners bought discounted slaves on the day after Thanksgiving. Having no factual basis, this theory has understandably led to calls by some for a boycott of Black Friday.
The actual story behind Black Friday is considerably less grim, although still unsettling.
It’s said that Philadelphia police officers in the 1950s were the first to call the day after Thanksgiving “Black Friday.”
Officers used it to define the chaos caused by huge numbers of tourists and shoppers flocking to the city ahead of the Army-Navy football game held on that Saturday every year. Officers were forbidden from taking the day off and worked extra-long hours to manage the additional traffic, crowds, and shoplifters.
By 1961, Black Friday had spread beyond law enforcement and caught on throughout Philadelphia.
Merchants and boosters tried to change the name to “Big Friday” to remove the negative connotation of Black Friday, but it never caught on. If it had, we would be looking at “Big Friday” ads today instead of “Black Friday” ads.
Sometime after 1985, retailers reinvented Black Friday with a more positive spin using the aforementioned theory that it’s the day a U.S. store’s annual performance finally becomes profitable and “in the black.”
Since then, the one-day event has evolved into a five-day bonanza.
Other retail “holidays” have spawned from Black Friday, including Small Business Saturday and Cyber Monday.
Stores began opening earlier-and-earlier on Black Friday and now shoppers can even shop on Thursday after their Thanksgiving feasts.
According to the National Retail Federation, 165 million shoppers spent an average of $313.29 in stores and online over the 5 days from Thanksgiving to Cyber Monday in 2018.
Investors often look at Black Friday sales numbers when gauging the retail industry’s overall health and their confidence is frequently influenced by sales that out or underperform expectations.
Ironically, Black Friday is not the biggest shopping day of the year for most American businesses; the last Saturday before Christmas Day is.