On this one, I have to respectfully disagree with the Smock.
PapaC's extended family lives in northern Illinois, and includes several nieces and nephews, some of whom are now in the dreaded tween/early teen stage. In past years we've tried it both ways. Here's the problem as I see it:
1. SHIPPING COSTS. The years that we have bought all non-card gifts, we have spent a flat fortune to ship the gifts. For what we spent on shipping (one year > $80--and no that wasn't priority or any other fast method. You just try shipping 2 oversize boxex that hold weird sized presents!) we could have upgraded everyone's gift! Plus, it was a MAJOR headache to find boxes to hold the boxes, etc, etc, etc. When you're buying for 8-10 people and trying to ship, it's expensive.
2. When the kiddos were little, it was easy to pick a gift, though a LOT harder to wrap. It's not that hard to send the latest LEGO set, or a tea set or a dinosaur--whatever the latest craze is in the kids' lives. But now that they are getting older, they want music--which I know nothing about--or some cards for a game deck--that I don't know which they already have 'cause each is different. Is it really that much more thoughtful to flat out ask them which BareNaked Ladies CDs they already have so I can fill in the collection, or is it better to send a Best Buy card so that they can get the one they want?
3. PapaC's brothers are not financially well off. Cash turns into the next school thing the kids need. Now, I'm not anti paying for the school things the kids need, and we have done it before. BUT THAT AIN'T CHRISTMAS FOR THE GROWNUPS! So for my brother and sister in law, who don't ever spend on themselves, we send a Chili's gift card (enough for TWO), a set of movie ticket certificates, and the money for a babysitter. We give them a night out. It is muy appreciated!
4. I give numerous small gifts to grandchildren of my friends. (It's the age thing, you know!) I typically get some funky little Christmassy thing--a Santa pen, a fluffy boa purse, etc, and attach a Slurpee gift card or a Sonic gift card to it. What other gift for $5 can I give that they would like half as much as those? Sorry, I don't think you can come up with an idea.
5. The guys Zteen's age and older that we give gifts to are all saving up for some game or gaming system that is more money than I am willing to spend. But I can help them buy it with a GameStop gift card--and every one of them has remembered that I helped!
6. I love getting gift cards myself. We are currently in tight budget mode--a mode that is likely to last until after college tuition is done. That leaves precious little money for trips to the movies or out to eat on Sundays. A dear friend of ours gave us movie gift cards. We were thrilled! Yee-haw! Chronicles of Narnia--here we come!
That doesn't mean gift cards are all I buy--I buy a mixture of things. When I see something perfect for the folks, they get a regular present in a box. For Craig's sister, who is mentally retarded, we ALWAYS buy a present in a box, shipping costs be d***ed. She wouldn't understand a gift card, or have a way to use it. Send a cute pair of pjs or an Elvis CD, and she is in heaven.
But I'll fight to the death (tee hee!) for the belief that in some cases a gift card is NOT the same as cold, hard cash and isn't a thoughtless present.