The tradition has roots in the Civil War, when those who could not afford Christmas gifts would tell the people they wanted to give a present, "Christmas gift!" in lieu of handing them a memento. (There's a scene in Gone with the Wind when Uncle Peter says, "Christmas gift, Mr. Rhett!" Now you know what Peter's saying and why, if you didn't already.)
My friend knows the source of her family's annual joke. I have my own plans for how I'll participate in the game this year, but I have also been thinking about the
significance of the phrase. The desire to give to someone we love matters more than the physical gift. My best Christmas gift arrived this year when my sister sent me a video of my niece Greta Jo "reading" Love is the Thread. At the close of the snip, Greta Jo says, "love Leslie. Love Leslie." (She actually says, "wove Wesee," but I know what she means.)
I'm not feeling the need for physical gifts to unwrap after that. And oh by the way: "CHRISTMAS GIFT!"