I'm thinking about buying something small that I can hand out to some co-workers, is there anything that's special from Spain (that can pass customs also)?

One lady just came back from Italy and she brought backindividually boxed chocolates.

In Madrid , there is a very old , tiny shop that specializes in "violetas" .. They have little gift packages . They´re candy that actually smell like violets .. very traditional . The shop is on Calle San Jeronimo near the intersection with Calle Príncipe .

Are you trying to one-up the lady that just returned from Italy? hehehe... If not, try the following:

Refrigerator magnets are always a hit, they're small, cheap, and easy to transport.

Small bars of turrón are good, easy, and not very expensive either.

I ALWAYS take cans of anchovy-stuffed olives home with me to distribute to friends and family. It's an ODD gift but the odder the better, I think, and VERY popular in Spain. Cans are cheap but, on the down side, 10 of them in your checked luggage could easily send you over your weight limit as they contain a lot of water too. This has happened to me.

That's all I can think of for right now. Saludos, MadridMan

Are you European ( or Swiss ) , Indelible ? It would help to know as there are things i´ve taken back to the UK , that my family loved , but that would be prohibited through non-European customs . For example , I buy a whole load of Jamón from my local deli and my family go crazy for it , but Unless you´re European or Swiss then you´d have difficulties .

Near Sol, there are plenty of gift shops...I always go to "Sol Souveniers", Puerta del Sol 2.....they have great things at a great price, and the little candies too....magnets, salt & peppers and of course Fans....

thanks for the tips. steve, i'm actually from the US, so no meat for me, sadly. and no, i don't want to try to one-up her haha, she makes at least 3x as much as i do

Key chains.

I grab a handfull for my friends kids.

I always bring back chupa chups and small boxes of the candy from La Violeta.Like Steve mentioned,tiny shop at Plaza Canilejas easy to miss but they do a booming business!-They are small boxes all wrapped in their paper w/lilac ribbon and cost about 1.50€.They are behind the counter so you need to ask/point to them.
By the way, there is a lovely little statue of the violet seller- Madrid's answer to Eliza Doolittle near the Segovia bridge off Bailen near the outdoor cafe overlooking Jardines de las Vistillas.

My first trip back to Spain when I had a proper job, I brought back the violetas for the secretaries in the office. They loved the gesture!! Isn't that what counts? Nowadays, I bring back food items, like olives, cookies, saffron, pimenton, and white asparagus.
For other acquaintances, I have brought back fans@!!!! a novelty for sure, but if the weather is hot (like in some parts of California) they just might use them!!

t Over the years friends have stopped by in Madrid and bought the summer alpargatas at the shop on Toledo just outside the Plaza Mayor.Someone told me about the keychains they sell -what a hit! 3 € for a keychain with mini alpargatas available in different colors/styles.Definitely worth the wait in line.I did feel foolish buying keychains while the Spaniards were stocking up on their vacation footwear!