I gave someone older a gift since I was visiting their home. They gave me a red packet because they thought the gift was costly. It was, but that’s not the point.
If you don’t know what a red packet is, it’s a red envelope with money that’s supposed to be lucky and given to someone younger.
I accepted the red packet before knowing it was for the gift, I can’t accept money for a gift but I also can’t return a red packet because it’s very bad taste and it would be bad luck.
What do I do now?
Keep it. Use the red packet for something or someone nice. I’m Chinese and people do this all the time. My parents who are over 50 still occasionally get red packets (not just from family either) and they just take them straight to the bank and nobody complains.
I suspect that red packets are more so used to give money to someone who would otherwise refuse it because it’s rude to not accept one.
I’d pass it on to someone younger than you. You didn’t benefit, the tradition/luck was upheld, seems like the best answer here.
Morally that makes you all squared up, although legally you still accepted it, so this advice is only good if you know you could get away with accepting money, since this sounds like you visit this guy as part of a job.