We don't do Santa with our kiddos. They get gifts from, like, real people only. They understand their gifts mostly come from stores (modulo, you know, hand-made things).
When the last year when then then-5yo started asking about it, we just said that, no, Santa wasn't real. He's just in books and stories and stuff like Mikey Mouse or Rosie Revere. We also said not to talk about that fact with friends because some parents pretend that Santa is real as a sort of game with their kids. But that we didn't really like that game, so we don't play it. The response was basically, "Oh. OK."