Australians are projected to spend $1.3 billion on Boxing Day and a further $2.4 billion during the last days of December, Australian Retailers Association and Roy Morgan research shows.
Around a million customers were expected to pass through David Jones's website and stores alone.
Crowds were "absolutely pumping" at the nation's biggest retail mall at Chadstone, in Melbourne's east, ARA spokesperson Alexandra Keefe said.
"Really positive signs, really busy out there and just a very encouraging Boxing Day sales period," she told AAP.
The end-of-year sales period was becoming increasingly important for retailers, with Black Friday and Cyber Monday shopping contributing ever-larger shares of revenue.
More and more shoppers were holding out for a bargain during the festive season as cost-of-living pressures continued to weigh households down.
With Christmas gifting in the rear-view, Boxing Day sales gave customers a chance to splurge on themselves.
"So items for the home and garden but also those personal luxury items like beauty, tech and digital are likely going to be very popular," Ms Keefe said.
Shoppers were expected to spend $378 million on household goods, followed by food ($296 million) and clothing, footwear and accessories ($197 million).
The projected 2.7 per cent spending boost compared to the same time last year was really encouraging, Ms Keefe said.
"From some of our surveying with smaller businesses, we know there is a bit of a sense of hopeful anticipation for the future."
Department store group David Jones expects to see up to one million customers in-store and online. (Bianca De Marchi/AAP PHOTOS)
While increased sales encouraged retailers, the spending spree sparked warnings for the environment.
Australians wasted more than $1 billion buying Christmas gifts this year which won't be used, the Australia Institute found.
The survey of over 1000 Australians revealed almost half did not think about how the gifts they bought for others will be disposed of while 52 per cent would have preferred it if others had not bought them a gift.
"Australia's rubbish bins are full of unnecessary extra waste this Boxing Day," said Nina Gbor, director of the think tank's circular economy and waste program.
"Embracing the principles of a circular economy over the linear take-make-waste model could help bring a deeper meaning to Christmas."
Sales signs during a Boxing Day clearance event in Sydney. (Steven Saphore/AAP PHOTOS)
Research from online e-commerce giant eBay predicts Australians could make nearly $1 billion from selling unwanted gifts this festive season.
The research didn't specify whether this figure was before or after platforms wet their beaks with seller fees.
"Not every gift sparks joy for the recipient but that doesn't mean it can't bring happiness to someone else," eBay Australia's Zannie Abbott said.
But with more Australians buying online, the Australian Banking Association is warning bargain hunters to watch out for scams.
"We all love a bargain but it's important shoppers don't end up getting more than they bargained for," association CEO Anna Bligh said.
"Scammers are out in force.
"They will use every trick in the book to deceive shoppers, including using dodgy websites imitating legitimate brands through to fake parcel notifications sent via SMS."
Australia's banks are taking measures to protect consumers, including actively blocking transfers to known scam accounts.
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