Continuity mistake: When Willie is in bed and the kid comes in with the Christmas countdown candy box he gets in bed with Willie. Willie's robe keeps changing from being open to being closed.
Continuity mistake: When John Ritter threatens to fire Billy Bob Thornton, and Billy thinks he's talking about the midget, it appears as though he shaved. However, in the next scene, where he is flirting with the young girl at the pinball machine, he isn't shaved.
Continuity mistake: The second time John Ritter is complaining to Bernie Mac, he is wearing a navy tie with his beige suit. Later in the same scene his tie has suddenly become green, as it was the first time he complained.
Continuity mistake: When Billy Bob Thornton comes back to his new job one day in a drunken stupor as usual, he slumps in his Santa seat half unconscious, with the shot from behind the chair showing Willie almost out of his Santa suit, fully exposing his white t-shirt underwear down past the shoulders. In the next shot from the front, with Bernie Mac towering over next to him and getting ready to carry him away while still talking to Marcus the elf, Willie is now fully covered in his red coat, messy as it may be.
Continuity mistake: One night after work, when Willie in his Santa suit and Marcus in his elf outfit are having their usual bickering in the parking lot outside the department store, there are two pedestrians walking on the other side of the street behind the elf with one person bringing a cell phone to his ear; when the shot switches back to the elf after Willie the (bad) Santa delivers his lines, the same two people can be seen tracing their same steps behind Marcus, this time with the phone back to the ear again.
Continuity mistake: When Willie goes to the motel that he is staying at, Opal, one of his many conquests, is sitting outside on a bench taking off her wig and shoes. In the next shot when Willie calls to her, she is seen taking off her wig and shoes again.
Continuity mistake: When Billy Bob Thornton gets woken up by his alarm clock, note the bottles behind the alarm clock. The labels are facing forward. Cut to the close of of Billy Bob's hand hitting the clock, and the labels are facing to the left. When it cuts to full screen again, the labels are facing forward. This happens several times.
Factual error: During the first mall robbery, when Marcus is sliding down the middle of the escalator, both sides of it are running. They would have been turned off as the mall was closed.
Continuity mistake: When the kid is sitting on Willy's lap and is holding an ice cream cone, the cone changes from several scoops to a melting cone in the wide shot. It did not have enough time to melt that much.
Audio problem: As Bad Santa is at the arcade "thrusting the girl", he is heard talking to her, and he is obviously saying something else, and at some points his mouth is closed. Very noticeable.
Continuity mistake: In the scene where Bernie Mac is going to take Willie to his car, Marcus says something to him and Bernie drops Willie. When he drops Willie he is on his back and close to the Santa chair. Bernie and Marcus begin to argue and after the argument there is a wide shot. Willie is now laying on his stomach further away from the chair.
Continuity mistake: When Billy Bob Thornton is awakened in bed by his alarm clock, the clock reads 11:15. While he is hitting the alarm trying to switch it off, he presses the 'Alarm-Set' button, and 12:00 (the default time on most clocks) flashes on, showing that the alarm wasn't set.
Continuity mistake: The first time John Ritter is complaining to Bernie Mac, in the shot facing John, Bernie is leaning back with his feet on his desk, but when the shot changes to face Bernie, he is suddenly sitting normally.
Continuity mistake: The first time we see Thurman Murman played by Brett Kelly, the kid steps off a bus to visit Santa in the mall. His upper lips is loaded with snot that is visible. The amount lessens in between shots when he's talking to Willy Stokes.
Factual error: The last half of the movie is supposedly set in Phoenix, Arizona. Since I live there, it was obvious that none of the shopping centers, housing developments, street names, police car markings, or police uniforms were from Phoenix. They looked like they were possibly from Los Angeles.