The One In Massapequa - S8-E18
Revealing mistake: During Jack and Judy Geller's party, there are many shots where Elliott Gould's (Jack Geller) stand-in is perfectly visible. First, when Catherine walks over to offer congratulations to Rachel and Ross. Second, when Ross looks directly at his "dad" to ask if they have to pretend they're married. Then, numerous wide shots of "stand-in Jack" and Judy seated together in the background, such as after Rachel mentions the ring being the size of her fist, and during the toasts, etc. (00:06:00)
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.