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England in the old days
Servants and the working class were required to work on Christmas day. They were responsible for making the holiday run smoothly for the rich landowners and gentry.
They were allowed to take leave on December 26th and visit their friends and families. The employers gave each servant a box containing gifts and bonuses. In addition, around the 1800s' churches opened their alms boxes (boxes where people place monetary donations) and distributed the contents to poor people on December 26, which is also the Feast of St. Stephen.
As time went by, Boxing Day gift giving expanded to include those who had rendered a service during the previous year. This tradition survives today as people give presents to tradesmen, mail carriers, doormen, porters, and others who have helped them.
Great Britian today
Few people have servants but the custom of giving gifts, gift baskets, gift baskets or money to those who provide service continues. It is also popular to visit grandparents and shop (the after xmas sales begin).
Most people get the day off from work. Boxing Day is also celebrated in places where the English have settled like Australia, New Zealand and Canada (the U.S. is the major exception). Our friends in Scotland tell us it is also celebrate there! Some places observe Boxing Day on December 26th and some celebrate it on the first weekday following xmas, so, if xmas falls on Friday or Saturday Boxing Day would be on the following Monday.
Now, the actual origin of this holiday is debatable and has been debated, one idea being more popular than the other at a given time.
Boxing Day Observance by Country
Boxing Day in the UK is a day when stores sell their excess Christmas inventory at significantly reduced prices. Boxing Day has become so important for retailers that they often extend it into a "Boxing Week". But recently there have been concerns about retailers over-pricing goods before Christmas day for making 'boxing day' sales seem more impressive
Boxing Day in the UK is traditionally a day for sporting activity, originally fox hunting, but in modern times football and horse racing.
English and Scottish Football matches
Boxing Day Dip - in certain UK coastal towns (including Whitby), people wade into the sea on boxing day - often in fancy dress, and usually to raise money for a local charity.
Football Matches played in Northern Ireland.All Premier League clubs in football play their biggest rivals. The most popular one is Glentoran v. Linfield, between the two biggest clubs in the league.
St. Stephen's Holiday in Wales is known as Gwyl San Steffan. Ancient Welsh custom, discontinued in the 19th century, included bleeding of livestock and "holming" (beating or slashing with holly branches) of late risers and female servants.
European countries Boxing Day is a holiday of peculiarly British origin, but in most years it falls on the same day as the Feast of St. Stephen (St. Stephen's Day - 26th December).
In Austria, Belgium, Denmark, Finland, Germany, Greece, Hungary, the Netherlands, Norway, Iceland, Poland, Slovakia, and Sweden, the 26th is known as the Second day of Christmas: Stefanitag in Austria, der zweite Weihnachtsfeiertag in Germany; Annandag Jul in Sweden; Anden Juledag in Denmark; Andre Juledag in Norway; Tweede Kerstdag in Belgium and in the Netherlands; Annar dagur jola in Iceland; Tapaninpaiva (St. Stephen's Day) in Finland; Karacsony masnapja in Hungary. In some of these countries it is also a public holiday. This day is also known in Spain as San Esteban, and in Italy as Santo Stefano.
In Ireland, the 26th December is known as St Stephen's Day, or Wren's Day. A practice known as Hunt the Wren is still practiced by some in the Isle of Man, where people thrash out wrens from hedgerows. Traditionally they were killed and their feathers presented to households for good luck. In Ireland, children used to kill a wren, then take its body from door-to-door, begging for money which they would use (supposedly) to pay for the bird's funeral.
In Germany the days between Christmas and New Year are called "the days between the years" (zwischen den Jahren) and are becoming more and more important for retailers to clear unsold Christmas goods.
In Canada, Boxing Day is observed as a holiday, except (in some cases) for those in the retail business. Boxing Day and the days immediately following are when many retail stores sell their Christmas and retired model products by holding clearance sales. Some shoppers will line up for hours at night (sometimes before midnight and after midnight on December 26) for retailers to open their doors. Retailers often open their stores earlier than usual, such as 6 or 7 am. Some retail companies internally refer to the sales week after Christmas as the "thirteenth month." (See Boxing Week.) It is similar to Black Friday, the day after Thanksgiving, in the United States. Boxing Day 2005 was the single largest economic transaction day ever in the history of Canadian commerce (according to Visa). Individual big box stores can even gross over CAD$1,000,000 on one single Boxing Day.
Contrary to popular belief in central and western Canada, sales on Boxing Day itself are not nationwide. Most retail stores are not permitted to open on Boxing Day in New Brunswick, Prince Edward Island, or Newfoundland and Labrador. Sales are deferred to the following day. In 2006, Nova Scotia eliminated a similar ban on Boxing Day openings, although most retailers elected to continue past practice and remain closed that day.
In addition to the retail aspect of the holiday, Boxing Day also serves as a second day for families to gather for dinner and to exchange gifts. Boxing Day dinner is, in many ways, just as much a part of many families traditions as Christmas dinner itself. 
Boxing Day has also been referred to as the day that people "box" up their Christmas decorations and put them away until next year.
From a sporting perspective, Boxing Day in Canada has many implications. It is usually on Boxing Day when the IIHF begins the World Junior Hockey Tournament. This is a significant event for Canada and Hockey Canada which have done extremely well at this particular international event. Boxing Day is also the start of another international hockey tournament: The Spengler Cup. This tournament, usually played in Davos, Switzerland, along with the World Junior tournament are aired on the two big sports networks in Canada (TSN and Rogers Sportsnet).
Australia & New Zealand
In a similar vein to the United Kingdom (see above), shopping occurs similarly in Australia and New Zealand, although some Australian states, including New South Wales are tightening restrictions on Boxing Day retail trading, deferring the post-Christmas sales to December 27.
Boxing Day is not observed in the Australian state of South Australia, because December 26 is Proclamation Day.
In Australia, Boxing Day has become a significant sporting day (similar to ANZAC Day celebrations). In Melbourne the Boxing Day Test Match is played at the Melbourne Cricket Ground, often before the largest single day crowd of the Australian cricket season. In Sydney, the Sydney to Hobart Yacht Race typically starts on this day.
South Africa Sports Events:
Boxing Day Test (Test Match cricket)
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