I'm a fan of gift cards, but not sure this is a "GIFT" - seems more like a credit card with restrictions.
1 - There are already credit cards that restrict buying power. For example, a company can set up employee gas card to only allow gas purchases. For parental control, I can see wanting to ensure my college kid uses a grocery gift card to only purchase groceries. But using a restricted gift card demonstrates a serious lack of trust in the process. Still, maybe it is needed for some. I'll give on that one.
2 - But I don't like that the giver receives a report on purchases made. This is supposed to be a GIFT. Once the merchandise is transferred, it's up to the recipient to do whatever it is he or she wants. Macy's doesn't send a report to my mother-in-law when I return the sweater she bought me. I don't have to send pictures to my aunt showing that I wore the jewelry she sent. I don't at all like the idea that the gift card recipient will be tracked. I love gift cards, but I don't want the person giving me one to know when I redeemed it, what I bought for it, or if I sent it in to a gift card exchange company to get the cash. It's a GIFT.