1. We don't buy Play-doh or the plastic play-doh kits that use little molds to make stuff. Making play dough is so easy and we do it about once a month around here. Add in some glitter or some spices like Apple Pie Spice and you have a great sensory activity for kids. We get out cookie cutters, rolling pins, and an assortment of kitchen utensils to make designs. It's great fun and it lasts all month long.
2. We don't buy those Crayola art kits such as "make a paint" set or "melt and mold factory". These succeed in just creating a big mess and they usually don't work out as much as the advertisements want kids to believe. They are usually big and bulky and you can't do much else with them.
3. We don't buy Movie or Character themed items such as "Elsa and Anna etch a sketch" or "Doc McStuffins Weaving Loom". Favorite characters come and go so we prefer to stick to the classic designs. They usually come with a lower price tag to boot!
Here's some items that if they found their way onto the Christmas list
Fisher-Price Travel Doodler Pro
This is the smaller version of the Doodle Pro which is great for small hands and also great to throw into a kid sized backpack to take along to the Dr's office or a road trip. 
Dough Tools - 5 Piece Assortment
Buy this sturdy, thick set of dough tools and pair it with a large container of homemade playdough or the ingredients to make play dough with a recipe card. Would look cute in a large mason jar! 
This kit says it is appropriate for kids age 6-12. Reviews are very good and it looks like something I would enjoy working on together with Camryn during the Christmas break. One reviewer said it took lots of sessions to complete so that sounds great to me. I like toys that aren't over and done with before Christmas day is over!
Melissa & Doug Lace and Trace Pets
Lacing Kits are great for improving hand-eye coordination and fine motor skills. I love that they can take the laces out and start all over again making this kit not a one time affair. We have this set and the ocean set. Camryn, 6, still plays with them in the car and we are working with Annika, age 2, to begin using these lacing kits. 
Wikki Stix Rainbow Pak
Wikki Stix are so much fun. They are sometimes known as Bendaroos. At this price of $5.30 you can buy two packs! Kids can reuse these over and over in so many ways. Want them to practice spelling words or math facts? Use these! Teachers use them in all kinds of ways in the elementary school. You can pair a pack with a $1 cookie sheet from Walmart and then they become transportable. 
Crayola Ultimate Crayon Case, 152-Crayons
This is the ultimate crayon kit. Pair it with a sketch pad and you're done. I always loved have "silver and gold" crayons along with cornflower blue and fuchsia. Such fun colors!
: My older kids played this for hours when they were in 2-5th grades. Ciarra was declared the Connect 4 Champion in her 4th grade class. Last month at the Octoberfest the entire family chose sides and played each other on a huge life-size Connect 4 wooden game structure.
: I recently began playing this with Camryn, age 6 at our library. The kids' section has a great selection of board games for free play. She is just beginning to understand how to phrase her questions to narrow down the choices. Fortunately for me she always picks a girl with blonde hair. Ha! My older kids played this when they were younger too. They even used a timer to see who could guess the other player's person the fastest. Caleb managed to get it down to about 3 specific questions before he could pinpoint who we had chosen! There's even a cool Super Hero version!
: The teacher in me wants to scream "Please buy this for your child. It will make them think!" Patterns, puzzles, and math all in one neat little game. This was my choice for free play in the gifted room way back then!
We recently bought this original version of Spot It during the summer. Can I tell you that everyone in this house loves to play! It was our game of choice for summer electricity outages and we always kept playing when the lights came back on. For a game to hold the attention of 5 teenagers and a 6 year old at the same time is amazing to me! There are several versions including an animal version that I think my kids would like. 