SAN FRANCISCO - DECEMBER 22: Shoppers walk by a sign offering up to 70 percent discounts December 22, 2008 in San Francisco, California. Retailers, fearing the weakest holiday shopping season since 1969, have slashed prices on items at stores across the country. (Photo by Justin Sullivan/Getty Images)
Shoppers hit the stores Friday to return unwanted gifts and take advantage of drastic price cuts offered by retailers desperate to get rid of old merchandise and boost their less-than-cheery holiday sales.
Many retailers opened before 6 a.m., offering 50 percent to 75 percent off on toys, furniture, electronics and clothing.
Stores were hoping the discounts would entice shoppers to redeem gift cards and use cash from returning unwanted gifts to buy something new.
"When they saw that there was no Christmas gift larger than the Christmas tree, they knew there was no TV," Hernandez said. "They know Mommy is out early this morning bringing home their new toy."
But consumers who saw plenty of bargains before Christmas still seemed to be spending carefully -- meaning even the big discounts may not be enough to salvage one of the most dismal holiday shopping seasons in years. Some were unimpressed with even rock-bottom prices while others were just flat-out returning items for cash.
After an early surge, several malls in the New York area were "quieter than expected" on Friday, said Marshal Cohen, chief industry analyst at market research firm NPD Group Inc.
Among the cautious consumers was Gigi Johnson, who bought laundry detergent and some clothes at Wal-Mart in Milwaukee for her twin 14-year-old daughters. But she said she was not planning any large purchases for the next few months and would put the money she received from Christmas in the bank.
"Maybe I'll wait until tax time and get a computer or TV," Johnson said. "But until then, I'm resisting the temptation to buy anything else."
The lure of after-Christmas shopping was hurt by the deep discounts stores offered before the holiday. Gift card sales have also been down, meaning fewer people are returning to the malls with "free money" to spend.
"The last week of December represents about 14 percent of Christmas sales," said C. Britt Beemer, chairman of America's Research Group. "You can't save a season with only one-seventh of the sales to go."
The holiday season -- which typically accounts for 30 percent to 50 percent of a retailer's annual total sales -- has been less than jolly for most retailers. Job cuts, portfolio losses and other economic woes have convinced consumers to cut back on their spending. Meanwhile, strong winter storms during the holiday season kept some would-be shoppers at home.
According to preliminary data from SpendingPulse -- a division of MasterCard Advisors that tracks total sales paid for by credit card, checks and cash -- retail sales fell between 5.5 percent and 8 percent during the holiday season compared with last year. Excluding auto and gas sales, they fell 2 percent to 4 percent, according to SpendingPulse.
Sales of women's clothing dropped nearly 23 percent while men's clothing sales slipped more than 14 percent. Footwear sales fell 13.5 percent. Sales of electronics and appliances fell even more drastically, dropping almost 27 percent.
More consumers appeared to do their shopping online, particularly in the last two weeks of the season when storms snowed shoppers in. Online sales dipped just 2.3 percent from last year, according to SpendingPulse.
Online retailer Amazon.com said Friday the 2008 holiday season was its "best ever," with more than 6.3 million items ordered. Holiday bestsellers included the Nintendo Wii, Samsung's 52-inch LCD HDTV, the Apple iPod touch and the Blokus board game. Cohen said Amazon did a great job offering deals and driving customers to its site, adding that "the best possible prices" were frequently on Amazon.com.
A better indicator of how retailers fared will arrive Jan. 8, when major stores report same-store sales, or sales at locations open at least a year, for December.
Retailers, who have been cutting prices all season, offered more deals for after Christmas. Toys R Us said it was cutting prices by 60 percent on some brands. Sears stores were offering doorbuster deals through noon.
Tom Aiello, a spokesman for Sears and Kmart, said Kmart customers were snapping up clearance items while Sears shoppers were buying smaller TVs. He said practical items, like Craftsman tool kits and tires, were also selling well.
The deals still weren't enough for some shoppers.
Paul McAdam, 48, of Everett, Mass., took a 20 percent pay cut recently and was shopping for "items I need in a price range I can't pass up."
"I'm a little disappointed because a lot of the prices seem to be about the same as before Christmas," he said.
Beemer said retailers may be greeting a lot of shoppers like Guites, and see returns up 50 percent to 60 percent.
Newlywed Anthony Guites, 32, planned to stop at three different Miami-area stores to return gifts from his wife. He had three things to exchange at Wal-Mart for a fishing rod he wanted.
"She got me a fishing rod that I don't like. She got me this tool set that I already have. And she got me workout clothes that, let's just say, are way too colorful for me," he said.
Associated Press Writers Sarah Skidmore in Portland, Ore., Betsy Vereckey in New York, Damian Grass in Miami, Mark Pratt in Boston and Dinesh Ramde in Milwaukee, Wis., contributed to this report.