After reading their behavior my first thought was "What the...!?!?"

1) they acted like brats and gifts are not mandatory nor to be expected. Miss Manner's and most of America would pale at the whole thing. You are under ZERO obligation to play this game.

2) who put them in charge? Aren't you the parent/grandparent?

3) when they pay for the gifts, then they get to decide what is or is not bought/made/obtained

4) give them a taste of their own medicine; hand them back the lay away ticket and say "No thanks, I prefer to get something else." If your wallet and heart are getting opened then you get to decide the item given.

5) maybe they are having money problems, etc. Still no excuse for the bad way they handled things. Maybe ask them "Is money tight? Have societal rules changed while I was napping? Have you thought of the example you are teaching your child?"

Upon, reflection I now think the same way as I first did. YOU should decide if to give a gift, what person get it and what 'it' may be.