Is this gift alright for a 2 1/2 year old?

I had ordered some long sleeved bodies for my babe, on purpose I order them a bit larger. Been thinking of using one as a gift for my niece that can fit perfectly along with some santa clause chocolate.

I only have taken off the tags and from its plastic bag. It's brand new and you can tell they have never been worn. A couple of family members say that might be embarrassing without a tag.

I get it if it's used but I'm just not about to spend extra cash anymore.