Why is it called Black Friday?

What to Expect from Retail This Black Friday
What to Expect from Retail This Black Friday

When most of us hear the term 'Black Friday' we think of an epic shopping day full of packed malls and parking lots, mobs of hungry shoppers and plenty of deals to go around for everyone.

Retailers coined the term 'Black Friday' many years ago. Now it's plastered everywhere you look in the weeks leading up to Thanksgiving.

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But most people don't know why we call the Friday after Thanksgiving Black Friday. All we know is that this infamous day has become synonymous with one of the biggest shopping events of the year. Retailers like Walmart and Macy's open their doors as early as midnight and you literally have to avoid being trampled at certain stores.

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But where did the term actually come from and what does it mean for the businesses that hold these Friday mega-sales?

Companies Used to Use Ink

It might shock some people to think that accountants used to use actual ink years ago when adding up balance sheets. Red ink was used exclusively to indicate losses. When the balance sheet made it out of the red, accountants would grab a black ink pen and start tallying. This meant they were making a profit.

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Black Friday was termed due to this phenomenon of sales going from the red into the black. Obviously, employees use computers for accounting purposes. And now Black Friday represents even more than that. Black Friday has come to officially signify the start of the Christmas shopping season. It also presents a unique opportunity for retailers to gain insight into what the holiday shopping numbers will look like.

Black Friday Indicator

It's pretty much tradition now for most big retailers to open their doors extremely early Friday morning to let in hordes of shoppers. Obviously these businesses are interested in selling lots of products. But Black Friday is also used as an indicator to what the holiday shopping season will hold.

Based on the number of Black Friday sales, many retailers will calculate their Christmas prices accordingly. If they see that the economy is doing well and there are tons of shoppers out, they might be able to raise their prices a bit since demand is up. On the other hand, if Black Friday numbers are dismal, they might have to offer lower prices in order to entice buyers a little more.

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So when you're out and about this Black Friday, standing in lines and trying not to get trampled at Walmart, remember where the term Black Friday came from.

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