E.H.
"Love and Logic" has a great approach to this topic. It would say that you have the talk with her and explain what you see and then let her make the choice. NOW is the time for her to make these "mistakes" with money so that when she is an adult she has learned the lessons. I know unfortunately I am one that learns through mistakes. It is so hard to watch, but a great way to learn when the stakes are low and she is not blowing her paycheck on things. This is a gift card so if she is going to purchase something that you don't feel is practical, you can think in your own mind that it was really a gift from someone esle and not a waste of family money. You sound like you are doing a wonderful job teaching her about money and helping her learn to be responsible with money. But you want it to be her choice so that when you aren't looking out for her she can do it on her own. A "mistake" or two while she is young will help her when she is older! Also, learning to use gift cards for things that are extra or not necessary is the way to go rather than spending what you dont' have or using money that is marked for other things. It is important to feel like you can have things you just want sometimes.