Yesterday 3yo Ds was at a children's Christmas party and was not very well behaved. There was a lot of shouting 'no' when he didn't want to do something, he was reluctant to say 'thank you' for his gift and as we were leaving, refused to say thank you to the host child and then threw his gift on the floor. I immediately confiscated the toy and told him off. He knows he has done wrong as he sobbed 'sorry mummy' all the way home and the first thing he said this morning was 'are you still cross mummy?' 
My question is what to do with the toy he received yesterday? Do I:
A) give it back and say nothing
B) give it back with lecture about behaving nicely
C) let him earn it back (not sure if hes too young to understand this as he is only 3 and 2 months).
Any advice appreciated!