Gift cards take the guesswork out of gift-giving.
Often when you buy a gift, it doesn't match up with the needs of the person you bought it for. Then the person needs to return it for something else or set it aside to bring out when you visit, or donate away, or sell it off on eBay. My dad bought a small TV for my mom every year knowing she would return it and buy something she would rather have. But the return lines are often quite long now, so returning isn't as easy as it used to be. A gift card will allow a choice to be made.