If you do happen to react with shock, cover it up by saying something like, "Wow! I wasn't expecting this!" or "I don't have anything like this!" Always thank a gift giver for thinking of you. Use or wear the gift once or twice around the giver, then donate it. Perhaps you think your uncle's eyeglass repair kit is a tacky gift, but it may come in handy someday - give a seemingly terrible gift a chance. And if you know for sure that you'll never use or wear the gift, why not get together with friends after the holidays to have a gift swap party? It's a fun way to "regift" that bad present, and you may get something you really love in return. The only reason not to be gracious when receiving a bad gift is if the gift is offensive or inappropriate. For example, a co-worker or your boss giving a sex toy in your office's random gift giving isn't all right - in fact, you might need to file a report with human resources. Giving the gift back with the explanation that it would make you uncomfortable to accept it is perfectly fine. Hey, there's always next year...