White Elephant gift exchanges are a great frugal party theme for Christmas. This sort of gift exchange can be done at work or home parties. It's cheap and fun. Other names for this include: Yankee Swap, Barona Gift Exchange, Thieving Secret Santa, Selfish Santa, Nasty Christmas, Dirty Santa, Scrooge's Christmas, Rob Your Neighbor, Thieving Elves or Chinese Auction.
Picture a white elephant. It's big and because of its white color it stands out. In a household, it has absolutely no purpose but to get in your way. A lot of people hold white elephant gift exchanges around the Christmas holidays. I've done it once at work last year and have scheduled to do it and my new job.
You can google it and find a number rule variations. Here's the rules in a nut shell. Gift value should be capped at a predetermined value. We used $20. People bring in gift wrapped items from their house that they absolutely don't want. Some people will go out and buy a gift if they can't find anything good at home. Before the gift exchange starts, everybody picks a number from a hat. Now that you established the order, you can start the actual exchange. The number one person selects a gift from the pile of wrapped gifts and opens it. Now, the next person has the option to steal any previously unwrapped gift or unwrap a new gift. If somebody has their gift stolen from them, then they take a gift from the unwrapped pile and open it.
Each person goes through picking or stealing gifts until you're out of gifts. We used a cap of three on the number of times a gift can stolen, but this can be varied.
When I did this last year, I picked out what I thought was the best gift. It was an over sized Starbucks coffee mug with some coffee. Somebody obviously didn't have a white elephant gift to bring in from home and went out and bought this. However, somebody after me decided that they liked it and stole it when their turn came. This then happened two more times because others liked the Starbucks gift. I ended up getting stuck with a scented candle. While I ended up with a gift that I didn't like, I thoroughly enjoyed the event theme.
For other white elephant rules you can refer to this wiki article and this google search.