The One With Rachel's Inadvertent Kiss - S5-E17
Revealing mistake: When Ross is doing his "Watching TV" bit, there is a brief shot of the blank screen that he is sitting on the sofa pretending to watch. In the screen's reflection, it is clear that the sofa is empty. (00:03:55)
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.