In the U.S., Black Friday is held the Friday after Thanksgiving. It usually marks the start of the holiday season and holiday shopping with Christmas right around the corner. It is notoriously known for having huge discounts and sales held by retailers and is often characterized by the swarms of customers who, defined by stereotype, fight aggressively and often compete to obtain any and all kinds of deals on as many stock items as possible.

The first Black Friday took place during the Black Friday Scandal, or the Black Friday Gold Panic on September 24, 1869. The scandal involved two scammers named Jay Gould and James Fisk. At the time, the president, Ulysses S. Grant, followed Andrew Johnson’s monetary policy and tried to reduce the number of greenbacks in the economy. Greenbacks were printed paper money “not backed with gold,” otherwise meaning there was no gold embedded in the dollar. They were originally created to help pay all the debts the government owed to Civil War veterans for fighting in the war, however, they eventually started breaching and dispersing into the overall economy. The intended solution was to trade greenbacks using currency backed by gold at a discounted price to encourage citizens into giving up their greenbacks. The scandal Gould and Fisk had originally wanted to execute was to collect as much gold and gold-backed paper bills as possible, so that when the demand for actual gold increased, they could sell it at a much higher price. This obviously conflicted with Grant’s monetary policy as his goal was to reintroduce gold-backed money back into the economy. Gould and Fisk, with the help of their associate, Abel Rathbone Corbin who had married Grant’s sister, tried to convince Grant to hold onto the gold. Nonetheless, suspicions soon arose and Grant discovered the schemers’ true intentions and issued the sale of $4,000,000 worth of the government’s gold. Panic soon reached the public as the sudden increase of gold in stocks surfaced and the price plummeted. The present-day Black Friday price drops connect to the sudden decline in gold prices and demand back in the 1800s. 

These price drops actually attract about 186 million customers each year, and studies show that Black Friday sales make up about 20% of total sales by retail stores. Additionally, according to the National Retail Federation, most shoppers spend about an average of $311.75 between the holiday period that starts on Thanksgiving and ends on Cyber Monday. Surveys reveal that about 28% of all American adults, 72.4 million people, plan to splurge on Black Friday deals in just the U.S., estimating about $22,570,700,000 dollars to be spent during Black Friday weekend. Despite such large and intimidating numbers, Black Friday sales hardly dent big businesses and take small tolls on average retail stores from which they usually recover quite quickly. 

Over the years the Standard and Poor’s 500, which is considered one of the best ways to track and measure the statistics of U.S. stock markets, shows that most retailers have strong return rates. After the dip on Black Friday, (average 2%) most stores have even higher return rates (average 4%) for the following seasons. The National Retail Federation predicts that 2021 will have the highest sales ever recorded due to the lack of in-person shopping during the pandemic. As for the economy, investors say that consumer spending drives the economy and holds a key role in economic welfare. Each year, customer spending contributes $2.6 trillion to the GDP. Despite this, a major issue constrained into the current situation is the lack of employees in these retail markets. As higher demands for products and services continue to rise during this period, it is obvious that more workers are needed to resolve the problem. With the already low workforce in many fields and stores, and the growing consumer rates getting ready for holiday shopping, it is unpredictable what outcome could arise in the future. The shortage of materials and staff could potentially grow into a problem as the unbalanced scale of growing customers and shrinking workforce might lead to economic instability. Another issue to take into consideration is the 6-feet-apart rule, though now less enforced, professors and news websites predict that there could be a new surge in the pandemic as crowding in malls and shops might allow the virus to spread. Many workers and news reporters advise shoppers to maintain distance and perhaps shop early this year to prepare for the holiday season.

Black Friday is sure to impact sales and the economy tremendously—please stay safe if you are planning to shop this year!