Etiquette for receiving apparently unwanted gifts?

by Karen
(Arizona)

We have several elderly neighbors, who we try to look out for all year. My husband and I often do little things like bringing their trash cans back from the curb.

At Christmas, we gave each neighbor a small gift with a nice holiday note.

One neighbor knocked on my door the next day--thanks me for the gift (a set of lotions) and then proceeded to insist that I take the gift back--saying that she is allergic to fragrances. I was shocked.

Later that week, a second neighbor saw me in the yard. She called over, indicating that the dog bed I'd gotten for her little dog is too small...and suggested I return it. She then left me standing outside while she ran in to get it and give it back.

Both situations were extremely awkward. Is it acceptable for these women to return an unwanted gift? Wouldn't it be better to simply say thank you and then regift, donate, or simply throw away the item if they truly do not want it?

I'm mystified!