The One With The Racecar Bed - S3-E7
Continuity mistake: In the scene where Joey's teaching soap opera for actors, his name changes from the 'a' being on the line to being above it. The line itself also reaches the far right of the board in some shots, and is short of it in others. (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.