The One In Barbados, part 2 - S9-E24
Other mistake: The layout of the hotel surrounding the main cast's rooms as displayed during the sequence where Monica, Chandler, and Phoebe eavesdrop on Ross, Charlie, Rachael, and Joey is physically impossible. Ross enters the room Monica, Chandler, and Phoebe are in through the same wall they are using to listen in on Charlie and him, though while the camera is in Ross and Charlie's room, no door can be seen in that wall. Furthermore, a hallway can be seen through the doorway while Ross holds the door open, implying that the two rooms do not share a wall in the first place.
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.