The One Where Joey Tells Rachel - S8-E16
Continuity mistake: At the end of the previous episode, Joey tells Ross that he has feelings for Rachel just as Ross is about to walk out of Central Perk, and there's a vase of tulips on the table beside the door and two things hanging on the coat hooks. The opening scene of this episode continues at the same moment of Joey's admission, and the vase has vanished and there's only a sweater hanging on the coat hooks.
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.