Most Revd Justin Welby said shopping in charity shops or giving money to good causes in someone else's name could be as well received as a lavish present.
He said these type of gifts could prevent people getting into debt over the festive period.
He told the Radio Times: "For some, the financial pressures of Christmas put enormous strain on their relationships: parents argue with one another and get more cross with their kids.
"But does it have to be like this?
"The most meaningful gifts are about expressing life, not luxury.
"Drawing up a list of people for whom one feels obliged to buy presents can induce a gnawing anxiety.
"Expensive gifts must be lavished, we are told, on immediate family, extended family, godchildren – not to mention the office Secret Santa. And then there's the price of Christmas activities: the ice-skating, the office restaurant meals, the pantomimes for the kids."
We spend more on Christmas presents in the UK than any other country in Europe and we're also more likely to get into debt over Christmas.
