US shoppers plan earlier holiday spending, PayPal says

PayPal has published a survey showing that US consumers expect to maintain or increase holiday spending while changing how they shop. The findings point to earlier planning and a sharper focus on value.

The Morning Consult survey of 2,005 US adults found that 64% of Americans expect to spend the same or more than in the previous holiday season, even though 58% said they felt greater financial concern heading into the period.

Shoppers are adjusting their behaviour in response. More than half, 58%, said they planned to shop before Thanksgiving, while two in five expected to begin holiday shopping by the end of October. Another 29% planned to start earlier than they did a year ago.

Budgeting emerged as the most common tactic for managing seasonal spending. Some 36% said setting and sticking to a budget would be their main approach, ahead of comparing prices at 32% and waiting for sales or promotions at 31%.

Rewards also featured heavily in purchase decisions. Some 67% of respondents were more likely to shop with a retailer that offered rewards or cash back, while more than two-thirds said they were willing to use saved rewards to help buy gifts. Another 55% had rewards available that could be used for holiday shopping.

Early trade-offs

The data suggests consumers are protecting gift-giving by cutting back elsewhere. Dining out was the area most likely to be reduced, cited by 39% of respondents, followed by gifts for themselves at 35%.

Some also said they would shorten gift lists or lower spending per person. The survey found that 29% would buy gifts for fewer people, while 34% would spend less on each individual gift.

Many said they were prepared to invest more effort in finding the right present. Seven in 10 respondents said they would visit multiple stores, and 63% said they would spend hours searching online.

Clothing was the leading holiday purchase category at 52%, followed by toys and games at 38% and beauty, personal care and fragrance at 32%.

Payment mix

The survey also highlighted continued interest in Buy Now, Pay Later products. More than half of respondents, 55%, said they had used or considered Buy Now, Pay Later. Among that group, three-quarters said they planned to use it or were considering using it for holiday shopping.

Budget control and the ability to spread costs over time were among the main reasons respondents valued these payment methods. In the survey, 59% cited feeling more in control of their holiday budget and 59% pointed to spreading the cost of purchases over time. Another 60% valued flexibility in choosing when and how to pay, and 60% valued access to promotions.

The findings also suggest these payment options can affect purchasing decisions. Some 42% said they would be more likely to make a purchase if Buy Now, Pay Later were available, while 56% said it could help them manage the cost of a higher-value gift and 57% said it would help with buying for several people.

PayPal offers Pay in 4, which lets eligible shoppers split purchases into four interest-free payments, and Pay Monthly, which provides longer-term monthly repayment plans. Its app also includes offers from brands and payment features tied to rewards and cash back.

Frank Keller, President of Checkout Solutions & PayPal, said the survey pointed not to a pullback in demand but to a shift in consumer behaviour.

"What's changing isn't consumers' desire to spend during the holidays, but how they're going about it," Keller said.

"Shoppers are starting earlier and taking a more intentional approach, looking for deals, rewards and cash back to make every purchase count while still prioritizing the gifts and moments that matter most. As they look for ways to stretch their budgets, PayPal helps them turn that planning into action by bringing together offers, rewards and flexible payment options, including PayPal Pay Later, throughout the holiday season."