Abstract: A packaging system compactly packages a string of lights for retail sale and for storage after use. The packaging system includes a tray and a container. The tray has support members for supporting the lights and a connecting member for connecting the support members together and for supporting the wire between the lights. The support members have holding clips for securing the lights thereto. Lights are secured to both sides of the support members. The wire connecting the lights together is wound around the connecting member, which is shorter than the support member so as to accommodate the wound wire. The connecting member also has retaining arms for retaining the plug to the tray. The tray and light string are disposed inside of the container. The container has a transparent box so as to allow viewing of at least a portion of the lights therein. A sliding back panel allows the back of the box to be opened, wherein the plug can be removed and the lights tested.