I can think of a couple of uses from the top off my head.
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For parents. This is a way to control what kind of products your children could get, giving them a limited sense of control.
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There are people that are not very generous when it comes to giving away something. Like those who won't give money to beggars because they believe beggars will spend it in drugs. But in this situation they think they keep some control on the money they give away.
In both cases, if the person is smart enough, they will find out how to make cash from the gift card anyway. However, they'd be really gifted salespersons if they can get the whole value back.