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1.
A gift given at a gift exchange, usually around Christmas time that is given strictly for comedic effect, to piss off the receiver, or both.

Extra joy can be achieved if given to a teacher, boss or someone in authority, although remorse almost inevitably follows.

Gag gifts come in wide varieties, as nobody has the same taste in humor (or despair).
I reached into the box expecting a great gift from my best friend, but then realized it was a gag gift when I learned he had given me a bar of soap.

A fur coat is the ultimate gag gift for a PETA advocate.
by Ohthelulz December 08, 2009