I didn't know either, Vicki, so I looked it up:
Each adult that is participating in the swap will bring a gift to the gathering. They should include a gift tag, which gives the name of the giver. My family is really into hand crafted gifts, so that is generally what is swapped. Also be sure to give a price range for your gifts, lets say $20.00 for example. Please make sure that you stick to that amount, it really is not fair for someone to have purchased or crafted a gift worth $20.00 to end up with something much less expensive. Now count up the number of people participating and make a number for each person, on a small piece of paper. Put the numbered papers in a hat, or bowl and instruct each participant to take a number.
Place all of the gifts in a grouping in the center of the room and have the participants sit where they can all see the gifts and each other. Now the person holding the number 1 will select a gift and open it, in plain view of all of the other participants. Some participants will want to cheat here, and not show what they have opened. This will generally mean that they have gotten a really good gift!
After person #1 has opened their gift, person #2 can either take the gift that person #1 has opened or select another gift from the grouping. If person #2 has taken the gift from person #1, #1 is now to take another gift from the grouping and open it. If person #2 has selected from the pile, it is now person #3's turn. Person #3 can take a gift from the grouping or take the gift that either #1 or #2 has opened. This will continue until all of the gifts have been distributed.
This may sound a little confusing at first, but just remember, if a gift has been taken from the grouping, the turn moves to the person holding the next number. If a gift has been taken from a person, that person can take either a gift from another person or a gift from the grouping. It is actually rather humorous to see adults acting like small children to be able to get and keep the gift they really want. There will be the typical hiding of the gift behind the chair and even major pouting. Of course on their turn, they can immediately take the gift back.
It sounds like a disaster waiting to happen for 7 year olds!
Beth