The One Where the Monkey Gets Away - S1-E19
Other mistake: When Rachel's watching the soap opera on TV while babysitting Marcel, she and Marcel are sitting in the middle of the couch, but in the closeup of Dr. Francis we can see the reflection of the empty couch at the bottom of the TV screen.
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.