At the Kenyon home in Nashville, what's under the tree often makes the family wonder whether it's Halloween instead of Christmas. Among the unwanted gifts: inflatable lips, tiny Red Power Ranger slippers and too-large blue jeans.

"You tell you mother-in-law what size your children wear, and it goes in one ear and out the other," grumped Sherri Kenyon, a 34-year-old Web site developer. "It was nice of her. She tried, but she just won't listen."

Luckily for Kenyon, her mother-in-law doesn't surf the Web. Because if she did, she would find some of her unwanted gifts featured at eBay Inc.'s online auction site.

EBay, already the world's largest flea market on the Web, has become a magnet for Christmas castoffs, such as diamond-patterned sweaters and Santa neckties. Better yet, customers say, they're able to get something for presents that can't be returned because they came without receipts or were purchased at faraway stores.

Officials at the San Jose company believe the "reselling" of Christmas gifts is at least partly responsible for a sharp increase in business the past several Januarys. EBay's sales shoot up at a time when most of the nation's retailers are preparing to wind down.

"You wouldn't expect an e-commerce site to have its strongest season after the holidays," said Daniel MacKeigan, an analyst with the Arlington investment firm Friedman, Billings, Ramsey Group Inc. "But they're really not an e-commerce company. They are the world's largest network of buyers, where people can trade anything, including their holiday gifts," he said.

Nevertheless, Wall Street isn't so enthused about eBay, lumping its shares with e-commerce stocks that have been dragged downward in recent weeks.

But the online "regifting" trend makes sense to consumers. As the nation's economy and stock markets have boomed, Americans' homes have become filled with stuff. To reduce the clutter, consumers are donating more items to charity, visiting gift "swap shops" and auctioning off other unneeded things.

"I think people have more money to buy things, but their closets remain the same size," said Christine Nyirjesy Bragale, a spokeswoman for Goodwill Industries International Inc. in Bethesda. "So they have to clear out their closets to make way for new purchases."

As a result, Goodwill has seen an average 6 percent to 7 percent increase annually in donations over the past five years. In August, the company opened its own Internet auction site to tap into the emerging marketplace.

Off-line, the gift-trading business also is drawing customers. Until Wednesday, two shopping centers in the Washington area will host swap shops where people can trade gifts they hate for someone else's imperfect gift or grab a $10 certificate.

Combined Properties, a real estate firm in the District, started its first swap shop at its Greenbriar Town Center in Chantilly last year. The concept proved so successful that the firm opened a second store this year at the Greenway Center in Greenbelt.

This year's doozies include a metal alien candlestick, a boxing nun puppet and a wall clock of the Last Supper that chimes

"We all get things we don't need, and we love to hate them," said Linda Dreyer, Combined Properties' marketing manager.

At eBay, executives noticed the spurt in sales about four years ago. Each year, they see a surge in traffic and merchandise sales volume in January, and hear about customers who want to auction off unwanted holiday presents.

In some cases, the fruitcakes, holiday neckties and sweaters with crazy-quilt patterns, the evidence is obvious.

"This just has Christmas written all over it," said Steve Westly, eBay's senior vice president, as he gazed at the description of one heavy wool sweater online.

But despite growing anecdotal evidence that the gift reselling has contributed to its post-Christmas boom in sales, eBay has kept quiet about the phenomenon.

"We try to be sensitive here," Westly said. "No one wants to see that special gift being resold."

Some customers don't mind, however.

Amanda Deal says she turned to eBay after some of her Christmas gifts for her 12-year-old son, Ben, proved to be duds. The "gorgeous" ski pants and the Levi's were too big, and he snubbed the vest.

She took the rejection in stride and figured she'd skip the crowds of holiday shoppers hitting the malls and instead sell her son's gifts online.

"I can make just as much money--or a little more," said Deal, a homemaker who lives in Streetsboro, Ohio. "And there's always someone who buys it."

Other auctioneers may want to look over their shoulders. Analyst MacKeigan, for instance, has sold a few unwanted gifts of his own, such as a decidedly unstylish sweater from a relative. And he also wants to return the George Foreman Grill he got for Christmas.

"Now," MacKeigan said, "the obvious question is who's auctioning off my gifts?"