It’s a sticky situation. A friend or acquaintance gives you a holiday gift and you don’t have one for them.
What do you do? Say thank you, of course. Don’t apologize for not having a gift for them.
But you might feel obligated to give them something in return. Yet you don’t want this to turn into a yearly obligation?
Give them a token gift. For example, you could give them a favorite recipe of yours along with one or two of the ingredients for it. That send a signal that you appreciate the thought but you are not interested in starting a gift-giving tradition with that person. Just give it with a smile and not too much fanfare. They will get the message & you’ve done it gracefully.
Of course the easiest way is to just say, “Thank you, that’s very nice of you.” And don’t say anything more & don’t give them anything in return. That sends the message in no uncertain terms.
Then there’s always “Oh you shouldn’t have” while you are thinking you really shouldn’t have!