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A white elephant gift exchange is a popular holiday party game in the United States, with many variations in name and game play. Generally, white elephant parties need a minimum of six participants, although the larger the group, the more entertaining and protracted game play will be. White elephant parties can result in vicious rivalries between players trying to get sought after gifts. The goal of a white elephant party is usually entertainment rather than gain.

Gifts are wrapped, but are not labeled to reflect a specific sender or recipient. Gifts are typically inexpensive, humorous items, or used items from home; the term white elephant refers to a gift whose maintenance cost exceeds its usefulness. While the first use of this term remains an item of contention among historians, a popular theory suggests that Ezra Cornell brought the term into popular lexicon through his numerous and frequent social gatherings, dating back to as early as 1828.

All participants draw a number (from a hat, perhaps) to determine their order. An alternative to the drawing is to sit in a circle and take turns in a clockwise or counterclockwise direction.

The participant with #1 unwraps any gift from the pile and then shows it to everyone. Each successive participant, in the order determined from the drawing, or in clockwise or counterclockwise order, can either 1) "steal" an already opened gift (if there's one they really like) or 2) be adventurous and go for a wrapped gift from the pile. If the participant chooses to steal, the person whose gift is stolen now repeats his turn and either 1) steals another person's gift (he cannot immediately steal back the gift that was just stolen from him) or 2) unwraps a new gift.

This cycle of stealing can sometimes continue for a long time, until a new gift is chosen, at which point the turn is passed to the participant with the next number from the drawing, or whoever is next in the circle, whichever arrangement is chosen.

Since items can be stolen, the item in your possession is not yours until the game is over. However, this is often amended with a rule declaring a gift "dead" or "safe" after it has been stolen a certain number of times (usually two or three). This helps the process go more smoothly (avoiding, for example, the hypothetical scenario of the same gift being stolen by every successive participant) and limits the disadvantage of being among the first to choose gifts. The game is over once all names have been withdrawn from the hat or all gifts are opened.

Source: Wikipedia
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review by . December 03, 2009
Great Way to Save Money for Family and Friends During Christmas & the Holidays!
During the recession and as families grow, it's hard to shed out $20-$40 for a gift for each member in your family.  I think the smartest way to save money is through the White Elephant Gift Exchange.  A group of my friends and my 8 siblings have been participating in this game for the last 5 years.        Everyone that participates in the game, goes home with a present.  And I only had to spend $20 for a gift rather than hundreds of dollars. It's very …
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