At least half of what my kids used to get for Christmas was used. I often bought the things in the summer at garage sales - back before the days of kijiji. The hardest part was hiding the items till Christmas.
I used money to buy containers from the dollar section of stores like Biway - dating myself right - and put the used toys in those and wrapped that. So instead of a box they got a plastic bin with lid of all the parts ready to be played with. Never a complaint.
And the upside was no extra boxes and packaging for garbage day and no waiting around to play with gifts while we tried to untwist, cut apart, etc the commercial packing. In this day and age if anyone complains remind them that recycling is good for the environment and comes with the bonus that you can spend the equivalent of $1000 on each child for the price of $200. Do not be ashamed of what you did.