Target has great clearance sales. Every January, July, and September, Target's toys go on sale for 75% off. Right now they are at 30%, but I expect them to go to 50, and then 75% in the next few weeks.
When toys go on sale, I buy a bunch to save for birthday gifts and Christmas presents, both for my kids and their friends.
We get invited to at least one birthday party a month (I'm not trying to be a snot, we have a lot of neighbors with little kids). Sometimes we only get a week's notice. It's so nice to have a stockpile of age appropriate gifts ready and waiting. This saves us a stressful trip to the store and a whole lot of money! All of the gifts pictured were between $1.50-$15 (normally $6-$60), most of them were under $4.
When we get invited to a party, I have my kids go downstairs and select a gift for their friend. We save all the gift bags we get at our birthday parties, so we have a great supply of those ready to go at all times.
I also let my children choose gifts for each other. They are young enough to forget what's downstairs, so they are always pleasantly surprised when they open their new gift. :)
To see more Target clearance shopping, click here.