Revenge spending or revenge buying is the phenomenon wherein consumers spend more money than usual after they are denied spending opportunities—for example, as a response to challenging economic situations or collective crises. Consumers could see it as making up for lost time.
Because revenge spending drives increased demand for goods and services, understanding this phenomenon enables retailers to adequately prepare. In this article, we’ll take a closer look at how it works and the impact it had on the industry.
How Revenge Spending Works
Revenge spending tends to follow crises like economic downturns, pandemics, or personal financial challenges. For example, a consumer could splurge when they have a new job after being unemployed for two years. It stems from pent-up demand.
Revenge spending is a largely psychological phenomenon. Here’s what happens at a high level:
- An intense or traumatic event occurs (e.g. job loss, global pandemic, or war) that has a direct impact on consumer spending ability (e.g. no money, lockdowns, or no inventory to buy)
- Consumers are limited in their spending ability
- The event ends, and the “world” goes back to normal (e.g. start a new job, no more pandemic lockdowns, war is over)
- Consumers regain their discretionary spending ability
- Consumers experience a psychological shift in their mindset that they must “make up for lost time” or that “life is too short”
- Consumers over-indulge and over-spend—often on luxury goods in addition to essentials
Explaining the Psychology Behind Revenge Spending
Here are two relevant psychological phenomena that can help explain revenge spending:
- Retail Therapy: The act of shopping as a way to improve one’s mood, relieve stress, or cope with negative emotions. It’s a psychological phenomenon where people use spending and purchasing items as a form of emotional relief or self-reward, often during or after stressful or difficult times.
- Terror Management Theory: Consumption as a response to existential threats. According to this psychological theory, when individuals are reminded of their own mortality (a “mortality salience”), they seek ways to cope with the anxiety it produces. One of the ways they do this is by purchasing products or engaging in consumer behaviors that enhance their self-esteem, status, or sense of meaning.
The phenomenon all boils down to three core elements:
- Emotionalfactors: Consumers use shopping to relieve stress, depression, and anxiety—especially during or after crises.
- Socialfactors: Desire to regain normalcy and indulge after deprivation. After crises, shoppers treat themselves with discretionary purchases (e.g. luxury goods, travel, dining).
- Financialfactors: Increased liquidity post-crisis (e.g. stimulus checks, savings during lockdown) often fuels the ability to spend.
Revenge Spending Examples
The world has certainly seen its fair share of crises in recent years. From a global pandemic to several geo-political conflicts, consumers bear the brunt of the unpredictable and unavoidable economic impacts of these events. When these challenging periods pass, consumers open their wallets and get back out into the world to start spending again.
COVID-19 Pandemic
The COVID-19 pandemic is perhaps the most wide-scale event in recent history that sparked revenge spending. It directly inhibited people’s ability to shop, both for essentials and non-essentials. Lockdowns forced businesses to close, and people were stuck at home for extended periods of time.
Not to mention, there was a ton of ambiguity about the health threat spreading around the world. So, people were constantly being reminded of their mortality.
Post-peak pandemic, lockdowns were lifted and life slowly started to get back to normal. And people started spending again. The items commonly purchased during this period of revenge spending were mostly luxury goods and travel-related purchases. Many also overspent on dining out.
One study on Science Direct found that this revenge spending was largely fueled by a motivation to deal with depression, anxiety, and sadness.
Here’s a further breakdown of post-COVID-19 revenge spending and how it impacted the economy from CBSNews:
Natural Disasters
Natural disasters, such as hurricanes, floods, and earthquakes, can also spark revenge spending.
According to the same research, hurricanes cause emotional distress, stress, anxiety, and depression. Post-hurricane spending is a mixed bag—many focus on purchasing survival necessities while others make leisure and luxury purchases to alleviate negative feelings associated with the event.
Following Hurricane Katrina in 2005, some individuals in affected areas spent heavily on non-essential goods like electronics, designer clothing, and luxury items as a form of emotional recovery. This type of spending often occurs after immediate needs like housing and food are secured, as people seek comfort through purchases.
Personal Financial Recovery
When people go through personal financial difficulties, such as long-term unemployment, divorce, major illness, or significant debt, they may trigger revenge spending once their financial situation improves. People often feel the need to treat themselves after enduring hardship.
For example, a person who has been unemployed for two years might begin indulging in luxury goods, vacations, or expensive dining once they secure a well-paying job, as a way to celebrate their financial recovery.
After a divorce, some people might engage in “freedom spending”—buying new clothes, taking luxury vacations, or purchasing a new car to mark their fresh independent start. Similarly, people recovering from serious health issues might splurge on vacations, high-end treatments, or luxury goods to celebrate their recovery.
Post-war Economic Booms
Historically, countries often experience economic growth fueled by pent-up consumer demand after wars end. Consumer spending surges as people return to normal life and splurge on goods that were scarce or unavailable during the war.
The post-World War II era saw a sizable increase in consumer spending in the US and Europe, for example. Items like cars, appliances, and homes were in high demand as returning soldiers and their families indulged in purchases that had been postponed during the war. There was a boom in the suburban housing market, along with car and appliance purchases.
Post-political Instability
After periods of political instability or economic sanctions, consumer spending can surge once the situation stabilizes. People tend to overcompensate by buying goods that were previously unavailable or inaccessible.
Impact of Revenge Spending on Businesses
Businesses should be aware of revenge spending so they can be prepared for the impacts—both negative and positive.
Consumer Behavior Insights
Let’s get psychological for a second. Revenge spending indicates that consumerism is largely an emotional behavior—it defies logic. Logical thinking would lead one to maintain conscious spending practices to be more prepared for the next economic crisis. But instead, consumers tend to spike in spending behavior after being restricted for so long.
You might even call this the FOMO (fear of missing out) effect, as people seek immediate gratification after periods of deprivation. They’re willing to overlook economic uncertainty in order to indulge in experiences or products they missed out on, even when finances are strained.
So, what does this mean for businesses? It means you can appeal to buyers’ emotions rather than logic when promoting your brand and products. For example, you might emphasize “self-care” and “treat yourself” messaging.
Create Limited-time Offers
Remember that FOMO effect we talked about. When running promotions during periods of revenge spending, lean into FOMO. Create the feeling of scarcity as a powerful trigger. Highlight limited editions, exclusive products, or flash sales to drive revenge spending behavior.
Focus on Luxury
Revenge speeding is a metaphorical sigh of release after a stressful, tense period. People are eager to indulge and treat themselves, so it’s a great time to focus on your luxury and experiential offerings. Even smaller retailers can capitalize on this trend by offering premium products and services that feel like a reward to consumers.
Cater to New Spending Categories
Post-crisis economies create new verticals and niches for business opportunities. Identify what consumers are splurging on in your sector. Beauty, travel, and luxury fashion often see strong post-crisis rebounds. For example, COVID drove lots of investments in home improvement and comfortable clothing. But once the pandemic was over, people started buying plane tickets again.
Revenge Spending in 2025
Revenge spending was popular throughout 2023 and 2024. However, as the COVID-19 pandemic continues to pass, revenge spending is becoming less of a culture-wide phenomenon.
In fact, TikTok’s 2024 Shopping Trend Report states, “2024 has experienced transformative changes with economic uncertainty and rising inflation forcing shoppers to become smarter with their spending habits. Gone are the days of revenge and doom spending, where shoppers try to buy back the time and memories … Now, people are intentionally spending through “loud budgeting”, adopting fun-flation – spending big on what brings them joy – and building buy-it-for-life communities.”
However, revenge spending will always exist on an individual consumer level.
Frequently Asked Questions (FAQs)
Here are some questions we often see being asked about revenge spending.
Toxic spending refers to overspending in ways that are financially harmful, often fueled by emotional distress, similar to revenge spending but with longer-term negative consequences.
“Revenge savings” is emerging as a counter-trend to revenge spending, where consumers are actively limiting their consumption.
A person splurging on a trip after being stuck in lockdown is an example of revenge spending. Another example is someone going on a shopping spree after experiencing a particularly stressful day.
Bottom Line
Revenge spending is just another type of consumer behavior retailers should consider for their business strategies. It’s still top of mind for many businesses from the COVID-19 pandemic not long ago, as well as the bout of natural disasters and hurricanes that seem to be getting stronger every year. Crises are unfortunate but inevitable, and they have significant impacts on consumer behavior. It’s best to stay apprised of these trends if you want to remain competitive and successful in your business.
