> Wouldn't the much better gift be to take them out for a meal at their favorite restaurant?
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.
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.