At our house, we spend "X" number of dollars per child. If the gift request is not within the spending limit, they do not receive that gift. We emphasize the real reason for Christmas. We explain that there are many people less fortunate than us, too. Also, in the past, we have given each child a gift card from Wal-mart and taken them to the store and tell them to pick out anything they want with that card. Then we explain to them that the toy(s) will go to the local women's shelter or underpriviliged children. Our children have a blast doing this once they get used to the idea that Christmas is not all about "me, me, me"
Thanks for the input y'all. We also have a set spending limit. It will just be the first year he doesn't get a lot of presents because of the cost of kayac. We do not do santa because we celebrate the birth of Christ although it is easy to get caught up in the hype. My husband has been saying we need to do something similar to what you are talking about. We have a country santa that could make good use of toys for underpriviledged children. Do you give them the card before Christmas and let them pick out the gifts. I think if we let them shop for stuff they would have more fun then just telling them we are spending less on them.