In the days before Christmas, while shoppers were fighting over the last few items on the shelves, the smartest consumers were sitting at home, waiting for the fifth quarter, or Q5.
In the retail world, Q5 is the unofficial period that begins Dec. 26 and runs through mid-January. It’s the time when retailers like Target, Walmart and Amazon are desperate to purge holiday inventory to make room for 2026 arrivals.
According to the National Retail Federation, nearly 70% of holiday shoppers plan to shop during this post-Christmas week. They’re armed with gift cards and return credits, and the retailers are ready for them with discounts that make Black Friday deals look like full price.
Here’s where you’re likely to find your best deals.
1. High-end beauty and fragrance gift sets
Gift sets are a nightmare for retailers to store once Dec. 25 passes. The holiday-themed sets take up massive shelf space, making them the first target for aggressive markdowns.
Starting Dec. 26, expect to see discounts of 50% to 70% at stores like Sephora, Ulta and Macy’s. These sets often contain full-size products that would cost double if purchased individually.
If you have a favorite skincare line or perfume, this can be the best time to stock up for the entire year. By waiting until just after the holiday, you can get your beauty routine at a steep discount.
2. Small appliances
If you have been eyeing a new air fryer, stand mixer or espresso machine, Dec. 26 is your day. Retailers often overstock hero SKUs (best-selling products) from brands like Ninja, KitchenAid and Keurig for the gifting rush.
AARP reports that small home appliances see massive year-end clearance as stores push to move older models before the new 2026 versions arrive in January.
Target, in particular, is known for its postholiday clearance, where you can find items marked down 30% to 50% on the day after Christmas. By the first week of January, those remaining items can drop as low as 70% off.
3. Name-brand pantry staples
On Dec. 26, anything with a seasonal label becomes a liability for retailers like Target and Walmart.
They need that shelf space for “new year, new you” health foods, meaning premium pantry items — from Starbucks peppermint coffee pods to Ghirardelli peppermint bark — will be marked down by 50% to 70%.
Look for items like flour, sugar and butter that often come in holiday-themed multipacks or festive tins. The product inside is standard, but because the packaging features a Christmas tree, it’s treated as clearance.
If you don’t mind a snowflake on the box, you can fill your pantry for half the price of the standard version sitting right next to it.
4. The semiannual toy clearance
For anyone looking to stock their birthday closets, the week after Christmas is the gold standard. Target and Walmart both launch their semiannual toy clearance events during this window.
The Krazy Coupon Lady predicts that Target’s toy clearance will start around Dec. 28 with discounts of 30% to 70% on brands like Lego, Barbie and Fisher-Price.
Because selection is limited, the sweet spot is usually three to four days after Christmas. You want to pounce when the discount hits 50%, rather than waiting for 70% and finding an empty shelf.
5. High-end bedding
While the traditional white sales happen in January, many department stores start their markdowns on Dec. 26 to clear out seasonal flannel sheets and heavy comforters.
Macy’s and Kohl’s typically offer up to 60% off on bedding and linens starting the day after Christmas. If you need new towels or a guest room refresh, this Q5 window is much cheaper than buying during the December rush.
Bonus: How to get an extra 5% to 15% off
To squeeze even more value out of these sales, use gift card exchanges to find bargains. Many people who receive unwanted gift cards sell them on sites like GCX or CardCash where you can buy them at a discount.
Before you head to the mall on Dec. 26, check these sites for discounted gift cards for the stores you plan to visit. You can often find Target, Sephora and other cards for 5% to 15% off.
By using a discounted gift card to buy a clearance item, you’re stacking your savings. A 50% off air fryer effectively becomes 60% or 65% off when you factor in the card discount.
Remember, the goal of Q5 is for retailers to get rid of items at any cost. Use their panic to your advantage and keep your hard-earned money in your pocket as you head into 2026.
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