I'd do something with food... one year I bought inexpensive glass jars and filled it with all the dry ingredients to make cookies. I sealed it with a pretty ribbon and a little crad with intructions on how to make it. The jar was pretty because of all the layers of flour, chips, sugar, etc, and it was fun for the other person.

My husband's secret Santa at work has a 5 day gift exchange where every gift is $5 or under the first 4 days. I bought her some candles at the dollar store that didn't look at all like dollar store stuff, and Walmart does have a ton of pretty bath sets, etc under $5 price. So we got her one very nice set there too. Then an ornament for another day.

Word of caution for incense and candles, etc... many people nowadays are allergic to perfumes. No candles for me, no insense, no handcreams or pretty bath bars. I get all congested just thinking of those things! My husband and about half the people I know are the same way. So just be sure that the person doesn't have any allergies to perfumes before you give the gift (unless you know they are hand cream and candle junkies! )