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[1], 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.[2][3]
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 The game is over once all names have been withdrawn from the hat.
[edit] Variants
The person who picked first also has the option of picking last or keeping the gift already in hand. After they exchange or decide to keep their gift, the turn ends and there is no additional swapping.
Another version of the game requires two decks of playing cards. Both decks are shuffled individually and one of them is completely dealt to the players. (If there is a odd lot of cards to players, some cards can just be omitted.) After that, one person flips the top card of the remaining deck; whoever has that card then takes a gift. The next card is flipped then that person takes a gift or takes someone else's gift. This continues until the entire deck is exhausted.
Another variant extends the game further: after the last person's turn, the first person has the option of keeping whose current gift (in which case the game ends), or swap with anyone else. If who chooses to swap, next person now has the option of either keeping the gift, or swapping. In this variant, the game only ends when either someone keeps the gift, or a gift has exceeded its trading limit.
Another variant allows the game to be played online using comment streams, linked images