Your son is a smart cookie!
We live in a small town. There is one man that acts as Santa here and the next town over. He has a real white beard and plays the part awesomely. We all know him and knows where he lives so for us he's no stranger. Other places, I do hesitate, so I try to avoid the malls when I have the kids.
Although, the mine where my husband works made a xmas party for the kids. Lots of activities for the kids to do, jump in the bouncy houses, inflatables etc. They brought a santa to give gifts and my daughter (5) told me that he doesn't look like a real santa lol. I told her that he's Santa's assistant since Santa is in another place to visit kids. She was ok with that.
I try to minimize the amount of toys my kids get because picking them up becomes endless! I aim for toys that have less things that go with it. Most of it gets lost anyways. But some I just can't get away from lol. Like legos. Those freakin legos. Those lego slippers I once saw to protect our feet are becoming more and more of an interesting item....