Georgia shoppers checking items off their holiday lists this year are experiencing sticker shock. The culprit has a name: giftflation.
Giftflation refers to the rising cost of gift giving, fueled by inflation and the growing pressure to give. For families across the state, that means their holiday budgets are being squeezed from both sides: prices are rising while their purchasing power is falling.
The Budget Squeeze
According to PwC’s 2025 Holiday Outlook survey, consumers expect their seasonal spending to decline on average by 5% from 2024, marking the first notable drop since 2020. The biggest adjustment is in gift spending, which is down 11% to an average of $721 compared with $814 in 2024.
But that doesn’t mean gifts are getting cheaper. Shoppers are being forced to buy fewer items or scale back their lists because prices have climbed so dramatically.
A recent NerdWallet survey found that to buy the same amount of gifts as last year, holiday shoppers would need to spend $182 more on average. Most families simply can’t afford that increase.
Sweeping tariffs have hit popular gift categories, such as apparel, household goods and appliances, driving up costs across the board. According to the NerdWallet survey, 74% of holiday shoppers expect tariffs to impact their holiday shopping.
Inflation is also driving up the price of food, energy, transportation and other essentials, according to data from the Bureau of Labor Statistics.
“When everyday costs rise, that leaves less room for discretionary spending when it comes to gift giving,” says Hillary Stalker, a certified financial planner in Franklin, Tennessee.
Surging costs come at a time when many households are coping with income disruptions from layoffs and the government shutdown. Shoppers may lean more heavily on payment methods like credit cards and buy now, pay later plans, which could lead to overspending.
Toys Hit Especially Hard
The price of toys, games and playground equipment increased 2.2% from April to May 2025, according to the U.S. Bureau of Labor Statistics, in the weeks after Trump began implementing his across-the-board tariffs. This represents a record price increase for toys.
According to the Toy Association, nearly 80% of toys sold in the U.S. are sourced from China. Tariffs on imported toys reached 22.4% for baby and toddler items and 20% for toys aimed at ages 3 to 12 in June 2025, according to Mastercard.
Looking Ahead
Shoppers may be relieved that, although inflation rates have been high in recent years, inflation has recently returned to pre-pandemic levels. As of September 2024, the Consumer Price Index rose just 2.4% over the past 12 months, the smallest increase since February 2021.
But since February 2020, consumer prices have risen by 21.4%, well above the historic average for a four-year period.
In a recent survey, nearly two-thirds of U.S. consumers said inflation and the cost of living would impact their holiday spending, with 24% indicating they may cut back on gifting if prices rise further.
B.T. Clark
B.T. Clark is an award-winning journalist and the Publisher of The Georgia Sun. He has 25 years of experience in journalism and served as Managing Editor of Neighbor Newspapers in metro Atlanta for 15 years and Digital Director at Times-Journal Inc. for 8 years. His work has appeared in several newspapers throughout the state including Neighbor Newspapers, The Cherokee Tribune and The Marietta Daily Journal. He is a Georgia native and a fifth-generation Georgian.
