We cut back several years ago. The nephews have everything they need, so they weren't very appreciative -- if they didn't get what they wanted from us, they'd get it from their parents. Basically we ended up trading money. The adults have everything they need, that is, that the other adults in the family can afford. LOL. We're all too busy to make handmade gifts. Mom doesn't know what planet she's on, so we just wrap up one of the multitude of picture frames that daughter received for high school graduation with a new picture of us all in it, and she's fine with that. So we stopped exchanging gifts with our extended family.
One friend of mine and I exchange food gifts. She always makes great cheese straws, and I make homemade pesto that freezes well and can be used for a quick dinner with pasta.
So that leaves me, hubby, and daughter. Hubby and I give each other some token gift just to have something under the tree, usually some new cooking gadget we want. We are at the stage where we have too much stuff -- we'd like to get rid of stuff, not get more.
Then we give daughter a few things off her wish list. She used to expect a lot, as in, one year she said, "I want a new condo in Midtown and a new BMW, or nothing." She got nothing except a small, token gift. She flipped out.
She has matured a lot since then and told me just this week that she apologizes for the above request because she now realizes that "things" don't bring happiness. So there's really not anything she wants for Christmas except for art supplies.
Bottom line: we cut back a few years ago.