Adwords Budget?

Hi - the way I would suggest approaching this is to work backwards from your business targets. How much do you want to sell? How much can you afford to pay for each new customer (CPA)? There are no hard and fast rules on what's achievable but if this is a new-ish campaign you can almost certainly improve it! And £5 per day for a gift related site doesn't sound much to me, with online gifts being big business. 

Armed with your goals, your order values and the data Adwords provides you can figure out whether you should, or can afford, to spend more.

It's hard to say much more without knowing the details of your campaign however if for example you can see a very high number of impressions for a particular phrase that seems to be converting relatively well (are you using Adwords conversion tracking  - very useful, nay, essential), is there scope to drive more traffic to your site from that phrase through e.g. bidding the phrase to a higher position, tweaking the ad copy, using related phrases derived from it and so forth. Google has also just launched a tool that will allow you to test various configurations of your landing page for conversion effectiveness.

Hope this helps

Iain