I know why they say santa gives naughty kids a piece of coal for christmas.

Think about it. Before natural gas or oil power the industrial revolution was using coal burning power plants. It created a lot of smog. What they don't tell the kids is that the present they get are created from coal factories. So basically if your naughty. Santa gives you a coal instead of making the present for you. You have to bring the coal to the factory and make the present yourself.

This comes into mind treat others the way you want to be treated. So basically, if your nice whole year someone or santa will give you a present. But if your naughty. You are on your own the whole year. That is the whole point of Christmas. It isn't all about the shopping like we have today.

Now stop giving spoil children presents every Christmas.

That's an interesting way of putting it, but I think the real reason has another esoteric meaning.

Don't tell the OP Santa isn't real. We don't wanna ruin Christmas for the little fella.

I think it might have come from the traditional Italian Christmas witch La Befana:

From memory La Befana was told that baby Jesus had been born. She wanted to go give him an offering but chose to sweep her house first. By the time she finished sweeping she went to look for the Baby Jesus but she had been cleaning so long that Mary, Joseph and Jesus were no longer at the stable.

So every Christmas eve La Befana flies around on her broomstick and leaves a gift all the children in the hope that one of those children will be Jesus

In popular folklore Befana visits all the children of Italy on the eve of the Feast of the Epiphany to fill their socks with candy and presents if they are good, or a lump of coal or dark candy if they are bad. In many poorer parts of Italy and in particular rural Sicily, a stick in a stocking was placed instead of coal. Being a good housekeeper, many say she will sweep the floor before she leaves. To some the sweeping meant the sweeping away of the problems of the year. The child's family typically leaves a small glass of wine and a plate with a few morsels of food, often regional or local, for the Befana.[3] She is usually portrayed as a hag riding a broomstick through the air wearing a black shawl and is covered in soot because she enters the children's houses through the chimney. She is often smiling and carries a bag or hamper filled with candy, gifts, or both.

La Befana

Forgot to add:

If I were to surmise why coal is given to naughty children I'd imagine that coal was an important commodity for the home; it fuelled the fireplace and it cooked the families food. I guess a naughty child receiving coal was a way to teach them to think about others and learn to put the needs of the family before self. To show them what is really important in life

I was always told it was because Santa comes down the chimney and through the fireplace, where a lump of coal/charcoal is likely the quickest crappy gift immediately at hand.

guess what i think is just a boring explanation.

kid dint deserve a toy, all though Santa still loves him, so gives him coal to help keep him warm during winter.
but i guess thats just too straight forward of thinking.

Wasn't coal something to do with giving the poor a way to heat their homes during winter?