I can't think of a gift I've ever returned. Like MsKimberly it's a lot of trouble. I'm also pretty sentimental so it would bother me to return a gift that someone close gave to me. That said, it doesn't bother me if someone regifts or returns something I gave if it's store bought. Something I make might bother me if I found out. I try my best not to find out!
The adults in our family do very little gifting, but that doesn't apply to the kids. At Christmas, what we would spend on material gifts we donate to a charity of our choice, and the choices each year are part of our Christmas brunch celebration. We announce our choices and share a bit of information about that charity.