The One With Phoebe's Cookies - S7-E3
Other mistake: When Monica realizes that the cookies were the Nestle Toll House recipe, Monica tosses the yellow bag of Nestle brand chocolate chips to Phoebe, and the brand name has been partially covered so it looks like "I Iest" and the Toll House logo on the side has also been partially covered.
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.