NEW YORK (FORTUNE) - You'd never know it from a trip to the mall, but big retailers are waging a war against Christmas.

That, at least, is the word from conservative Christians and the pundits at Fox News.

The American Family Association, a Mississippi-based Christian group, promoted a boycott of Target because, it alleged, the chain store banned the word "Christmas" from its commercials. The Catholic League accused Wal-Mart of discriminating against Christmas on its Web site. Lowe's came under attack for selling "Holiday Trees."

And John Gibson, a Fox News anchor, is flogging his new book, called "The War on Christmas: How the Liberal Plot to Ban the Sacred Christian Holiday is Worse Than You Thought" (Sentinel, 2005).

Not to be left out, Fox's Bill O'Reilly launched an "investigation" into how big department stores are marketing Christmas. "There is an anti-Christian bias in this country," O'Reilly declared, "and it is more on display in the Christmas season than any other time."

That's odd. On display in my neighborhood are wreaths, plastic Santas and reindeer.

Some of this so-called controversy is trivial. Banners outside Lowe's stores advertised "Holiday Trees" until customers complained. Lowe's promptly issued a statement apologizing for "any confusion the banner created" and said all 49 varieties (!) of its live and artificial trees would henceforth be labeled "Christmas Trees."

"If it's a Christmas tree or a Christmas card, let's call it that," says Patrick Murphy, a marketing professor and the director off the Institute for Ethical Business at Notre Dame. "This bending-over backwards to be inclusive can look silly."

Some of the debate is ill-informed. Target says it never banned Christmas from commercials. When it promised to mention Christmas and Hanukkah in its advertising as the holidays approached, the American Family Association called off its boycott. Plug the word "Christmas" into Target's Web site (as a Washington Post writer did) and some 39,000 products turn up. Wal-Mart, for its part, simply relabeled a "holiday" page on its Web site as a "Christmas" page, which quieted the Catholic League.

If ever there was a war on Christmas, the holiday seems to winning -- with or without help from O'Reilly & Co.

The truth is, Americans have fought about how to celebrate Christmas since the Puritans settled these shores. (Some were fleeing a state-imposed church, but that's another story.) Religious leaders once objected strenuously to the commercialization of the holiday, and a few still do.

There's a long tradition of conservative defenders of Christmas, ranging from Henry Ford to the John Birch Society, who accused an array of enemies -- Jews, Communists, secular humanists and the ACLU -- of trying to destroy it.

Even now, the debate can turn unpleasant. Donald Wildmon, the chairman of the American Family Association, told ABC News that retailers should play up Christmas even if some customers are alienated. "Tough luck," Wildmon said. "This is an overwhelmingly Christian country."

So how can retailers avoid getting caught in the culture wars? Experts say companies should think carefully about their marketing well in advance, listen to customers and employees, and then be willing to explain whatever approach they take.

"Where companies get into trouble is where they react to a controversy in a way that doesn't fit with their core values, or when it looks like they are reacting to pressure," says Thomas Dunfee, a professor of social responsibility at the Wharton School of business. Companies with a Christian identity, he said, shouldn't shy away from talking about Christmas.

David Miller, who directs the Yale Center for Faith and Culture, says big companies may want to give local store managers more authority over their messages, while encouraging what he calls a "faith-friendly" approach. "There may be places where Merry Christmas is the message that works best, and others where Happy Hanukkah makes sense," Miller says. "Happy Holidays" may not be a happy medium, he notes, because "trying to be the least offensive can sometimes be the most offensive."

Others agree. "Real pluralism means expanding the public conversation, not limiting it," says Michael Cromartie, vice president of the Washington-based Ethics and Public Policy Center, a conservative think tank. "Companies should be able to say Merry Christmas and Happy Hanukkah and Happy Holidays and have a blessed season, no matter what you believe."

The irony is that retailers have invited the scrutiny they now face by associating themselves so closely with a religious holiday, notes Ravi Dhar, a professor of marketing at the Yale School of Management.

"In Biblical times, holidays weren't celebrated with sales," Dhar says. "Marketers have trained us to expect a commercial Christmas. They invented the idea of having Santa sitting outside malls. Now it's come back to haunt them."