I think gift cards have the implied context of “treat yourself”. Ie I might give a gift card for your favorite restaurant. The cash might just be used at the gas pump or buying groceries.
Wouldn't the much better gift be to take them out for a meal at their favorite restaurant?
> The cash might just be used at the gas pump or buying groceries.
If someone gives me some money and I spend it on gas or groceries, then I clearly need the gas or groceries the most at that time. I don't see the problem with that.
But my main point, really, is that both cash and gift cards are (generally speaking) terrible gifts because they don't have the one thing any great gift needs: to indicate that the person cares about you enough to put some thought into the gift. The actual gift isn't the thing itself, it's the time and attention put into the thing.
But between the two poor choices, I consider cash to be the better option.
You're thinking of gifts for local friends/relatives. Think of your grandmother who lives 5000 miles away and has never been on a plane. Can she take you out to eat on a whim? No. But she can connive to get you to take yourself out to eat, and think of her as you do so, making you perhaps a little more likely to take a 5000-mile flight to visit her one day. This is the use-case that gift-cards serve.
That's a reasonable use case (although I still think there are much better options).
However, that's not the sort of use case that is usually involved when people give gift cards.