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I would probably hold onto the money until he actually needs more clothes and not spend it right away.

If you're into thanking them with pictures, I'd buy an outfit in the next size up to wear to the next party or outing and take thank you picture to the gift giver. I'd save the rest of it until he needs something.

Or if pictures aren't necessary, just save it until you definitely need something. There's a few times when I thought she had so many clothes, only to find out she needed something/more of something during her next growth phase.

I too like the idea of buying one special outfit in the next size up (and showing them) and saving the rest. I think of it as, you will buy clothes again. Even if you spend the rest of that $100 on something else, I am 100% positive in the next few years, you'll spend at least $100 on clothes, wherever that money comes from. So, if you buy the one outfit intentionally now, and spend the rest later as needed, you have fulfilled their wishes.

Plus, most people when they give money, it's really so the recipient can use it on what they really want/need, instead of something trivial the giver picks out.

I would put it in LO's savings account.

I would take inventory before doing anything. Sometimes I feel like my LO has a lot of a certain size, but when I actually sit down and lay out all the items in that size; I find she is low on pants, or sweaters, or a certain item (and often, has a surplus of something else in that size).

If your LO is good across the board on items, then I would buy a pair or 2 of shoes for later. I think baby shoes are absolutely ridiculously expensive and I hate spending money on them, so for me, using gifted $$ on shoes works out perfectly because then I don't feel guilty/crabby spending $30 on shoes she won't wear long!

You could also wait until Baby Gap, Carters, Children's Place, etc. is having a really good sale and then stock up!!