Okay, I have a 10 year old daughter.
I have a personal idea/budget per kids' friends, gifts.
However, my daughter, likes to buy her friends, a gift for her friends, with her own money. ie: allowance. And SHE budgets how much she can... spend. She does so. And she is rational and realistic about it.
So at that point, a "gift" for her friend(s) for a Birthday, is NOT going to cost, much. Say $10 max. or even less sometimes. And it is never a problem.
Because, a kid/her friends, know, that my daughter bought their gift with her "own" money. And many of her friends do the same.
It is not expensive gifts. But "thoughtful" type gifts. Things that my daughter, KNOWS her friend will, like. And it is not throw-away type junky gifts. But does not cost much. I go with my daughter to a store, and "help" her decide, since she likes my thoughts. But she is a savvy shopper and knows prices and sales and what is a good buy or not. She knows. But she likes my input. But she makes the final decision. And she pays with her own money.
I don't make her... pay with her own money. She wants to. It is for her friend. But, if something costs a little more than she can or wants to spend, I may put in the balance. Say like $3-5 or so. If need be. I don't mind. Because in the end, my daughter "decides" on the gift for her friend, and she is a smart shopper, and shops for what her friend, will like and she always gets a gift receipt with it.
Me personally, I don't care if it is a milestone B-day or not, I get gifts that are in my budget. And that is with thoughtfulness, hopefully, of the person to whom we will gift a gift.
I don't spend, $25. But less. That is what *I* can do.
Everyone is different.
And it is also, regional or per a community and all that.
Now with my son who is only 7, I buy the gift for his friend's B-day. But he will tell me "he" can buy it. He tries and is willing. But he is only 7, and though he will tell me "here Mommy, here is $2, for Tommy's gift...." I can't take it from him! LOL
Anyway, I don't spend more than $10-15.
But my son has a good friend, who (his Mom) routinely will give him things that are like $30, and this is for X-mas and birthdays. But well I cannot spend that much, in kind. But with his friend and the Mom, they are never nit-picky about it at all. They know we can't give $30 gifts to everyone in kind. Even if they can.
The bottom-line is: go according to what YOU can afford.