The One With The Ride-Along - S5-E20
Plot hole: When Rachel picks up the box of photos they all fall out, because the box isn't sealed with tape or even folded properly. But there's no way for that to have happened. Monica would have brought the box from somewhere and put it on the couch, and the photos would have fallen out then, and she would have fixed it (this is Monica, after all.) The only way for this to have happened is if she put the empty box on the couch, unfolded/unsealed, and then put photos in it - which Monica would not do.
Answer: Usually by the seventh night of Hanukkah you don't know what to get the other person, and you will probably resort to getting the other person something insignificant. Chandler is basically saying that the pen is a stupid gift.