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When it comes to holiday cheer, more people this year are saying that money doesn't necessarily buy happiness.

"I'm shopping a lot less this year," said Angela Grenzer, who was browsing at Stanford Shopping Center Monday evening.

Family members will each pick another adult's name and buy that person one gift, she said.

But she won't skimp on the kids -- her 11 nieces and nephews. Each will get one toy and one outfit, she said.

"Definitely, I will buy things on sale," she added.

The family is planning a group vacation to the Bahamas, she said, echoing a common sentiment expressed by consumers this season.

Closeness to family takes precedence this year, they said.

"We're not doing gifts. We usually travel to Chicago, and we're not going to be traveling. We're planning a low-key, close-to-home holiday. It's really tough this year," said Wendy Gapastione of Redwood City.

Her family stopped giving gifts to adults last year but maintains "a little tradition of three gifts" for the children.

The Gapastiones are avid coupon clippers, so she'll shop looking for discounts and bargains, she said.

They're not alone. Unemployment is changing the shopping habits of many families this season.

"I'm not spending any money this year," said Carol, a grandmother who declined to give her last name while shopping at Stanford Monday evening.

Her family members have lost jobs, and one lost a home to foreclosure, she said.

She isn't buying gifts for her grandchildren, either.

"They are so young they won't notice, but their parents will buy gifts for the little ones," she said.

At the Paper Source, a gift wrap and card store at Town and Country Village, more people are coming in for do-it-yourself ideas, said Matt Dettman, store manager.

"A lot of people are doing homemade gifts and want packaging for baked goods, candies and creating their own cards," he said.

The store will hold a gift-wrapping class on Dec. 3 and will host a weekend of make-and-take holiday cards, he said.

Two women emerged from the store with diametrically opposed opinions.

"I usually do a mix of purchases and homemade gifts, depending on what people like," the younger woman said.

"No way," said the older woman, of the notion of homemade gifts.

"Who has the time? Who doesn't already have enough tchotchkes?" she said.

But the poor economy isn't affecting everyone's holidays.

Troy and Shannon of Menlo Park said they wouldn't change their shopping habits.

"We just bought sale things," they said, carrying several bags and packages.

The couple frequents local shops as long as the price isn't extravagant, but if there is a significantly better deal, they'll go to a chain store, they said.

Linda Le and Set Guong don't have a holiday budget, they said. The couple started buying items on sale in October, browse Sunday newspaper ads and take advantage of free online shipping, they said.

It's nothing new. They said they do the same thing every year.

"I do a lot of online shopping. But I'm trying to do local shopping so the tax money goes to our own roads," Le said.

Online shopping could spell trouble for retail stores, one veteran of the shipping business said.

A UPS employee, who declined to give his name, said he's seen an increase in shipping. Fewer people are going into the stores, he said.

"The commercial (shipping) volume has come down, and the residential volume has gone up," he said.

He is also planning to cut back on spending.

"There's less money," he said, adding he'll stay around the area and travel less this holiday season.

"You gotta get creative. I've lived here all of my life, and there are many things I've never done in the City. My wife and I have a mutual agreement to cut back on gifts for each other. We're planning a trip to Hawaii after the holidays," he said.

The trend is away from commercialism and more on togetherness, he said.

"How many Nintendos and Wiis do you need? You emphasize more on family, not on how much you spend.

"Who really needs the material things? It's the physical, the closeness to people, that counts," he said.

Perhaps providing the best hope for retailers are shoppers such as Carolyn Benfield.

Last Friday evening, she perused merchandise at Ambassador Toys at Town and Country.

A grandmother of two, Benfield said she does quite a bit of shopping at the center, which is conveniently located just across the road from her job at Palo Alto High School. The revitalized center has many "great new shops," and she doesn't plan to alter her pattern.

"I always tend to throw caution to the wind at Christmas time," she said.

— Sue Dremann