Is it okay to rewrap clunker gifts—say a neon Hawaiian shirt that you’d never willingly wear or a book about backyard chicken coops, even though you live in a high-rise—and pass them on to someone who might actually appreciate them?

Those who recycle presents were dissed on a classic January 1995 “Seinfeld” episode. In "The Label Maker," Elaine was outraged to discover that a friend had passed along a label maker she had given him—to Jerry, of all people. “I knew it!” Elaine exclaimed when she showed up on her friend’s doorstep to ask to see the label maker. “You’re a regifter!”

But times have changed, and the regifting stigma has gone the way of new “Seinfeld” episodes. Three out of four Americans surveyed by American Express in 2014 considered regifting perfectly acceptable. And a 2015 Consumer Reports nationally representative survey of 1,000 adults in the U.S. found that one in five regift holiday presents they don’t want.

These rules will help you do it right—and stay out of trouble:

  • Regift only brand-new items that match the recipient’s tastes. Unless you’re passing down a family heirloom, any regift should be unused, and it should be something you would have bought for that person.
  • Search for telltale signs of regifting before wrapping a gift. Make absolutely sure you remove any gift tags or cards from that Hawaiian shirt before you put it back in its original packaging and rewrap it. And if you’re regifting the book on backyard chickens, check to make sure there’s no inscription to you. “I know someone who got a dress shirt as a gift from his father, but when he pulled it out of the box, he saw that it was monogrammed with his dad’s initials,” says Kit Yarrow, Ph.D., a consumer psychologist and author of “Decoding the New Consumer Mind: How and Why We Shop and Buy” (Jossey-Bass, 2014). Oops.
  • Make sure the giver and receiver won’t cross paths. Regifting among immediate family members is a no-no. Imagine your mother walking into your sister’s house next Thanksgiving and seeing her in the sweater she knit especially for you. The same goes for friends in the same social circle.
  • Keep track of who gave what, so that you don’t sabotage yourself. “One of the best stories I’ve heard was from a woman who gave her friend a beautiful set of coasters as a housewarming gift,” Yarrow says. “A couple of years later, when that friend traveled to visit her, she brought along a hostess gift that turned out to be that same set of coasters—still unused in the original packaging—because she’d forgotten who had given them to her in the first place.”
  • When in doubt, remind yourself that you’re reducing waste. “I love regifting because it’s actually a wonderful form of recycling,” says Elaine Swann, a lifestyle and etiquette expert based in Los Angeles. “And if you don’t have someone else in mind who would appreciate that gift, donate it to a charity so it ends up with someone who could really use it.”

Editor's Note: This article also appeared in the December 2015 issue of Consumer Reports magazine.