Well, either your sister has bought you a horrible bag for the lolz (in which case your issue is that your sister is a bit weird, or your relationship with her is, or both)...
OR she thought you'd like it & made an error of judgment about your taste.
Only you know which!
But if it's the second, just pass it on to a charity shop, or to a passing teenager who'd love it, or return it if you have the receipt. Absolutely no drama required.
I agree it's pretty ghastly - if someone bought it for me I wouldn't use it or keep it. But unless there was an otherwise solid reason to believe that they were deliberately trying to yank my chain, which seems a tad far fetched without a back story, I'd just assume they'd completely misjudged my taste & quietly pass it on.