Small update.
The resolution has been as follows:
That’s the dumbest fucking idea I’ve heard in a long time.
I have no patience for this kind of BS. Sell it on eBay for $375. Order crap from Amazon. Problem solved.
I would be thrilled to have gotten a gift like that.
Or even, save a step, and order $400 crap from Kohls.
This is the third – – or is it the fourth? – – Thread you have posted that I have read about your wife. I hope she is getting some professional help.
I can understand finding the “gift” of more shopping to be stressful
I probably would have handed the card to you with " your parents, your job. "
Gets a $400 gift card and starts crying in anger…
Thats real head up your arse territory so it is.
There is either:
a) Some serious history there, and the mother HATES her FIL.
or
b) These people are so rich that 400 dollars is garbage to them.
Either way, the reaction is nuts. Keep the gift, and be grateful, or return it and burn that bridge. Grow up either way.
And google DWIL. You will thank me.
This, and similar comments, are pretty clueless. I agree that it was an overreaction, and I agree that she could have handled it better.
But what she really got was a directive to do a whole lot more shopping in the ten days before Christmas., knowing that the credit for the gift would go to someone besides her, and that she’d be expected to sit by smiling as the kids thought the grandparents were so sweet. It’s a little annoying to be asked to do extra work and then lie in a way that covers up for other folks’ lack of work. I get that.
The reason I like the shopping spree is that it requires very little extra work, and none before Christmas (which is a stressful time), AND it requires no deception: the kids know exactly what the grandparents got them for gifts.
Want to clarify something else, not that this will make her reaction seem that much better to some of you, but just to be clear: She spent a moment emoting, then immediately went to work, and the problem was solved within 24 hours. And all of this took place “behind the scenes” as it were, not a big event staged in front of the whole household or anything like that.
If my mother (or mother-in-law) did that for me and I didn’t have time to buy them stuff, I’d tell the kids “Grandma sent you guys a gift card for Kohls so we’ll go by there (or look at the website) [after this weekend/after Christmas/at some point in time].” I mean, if she had sent them each a card, I’d put each one under or on the tree but since I only have one they get a general announcement.
My kids would be okay with that because they’re not measuring anything by the number of boxes under the tree and would know that they were remembered by Grandma.
Edit: Not meant to imply that Frylock’s kids measure anything by anything, I don’t know 'em. Just saying why it’d be no big deal to me in my household.
The worry might be more that the grandparents wouldn’t be okay with that: they made this generous gift with certain expectations and to not meet those expectations is shitting on their generosity. This thread is full of people mad at her for exactly that–for not appreciating what the grandparents did. If she really didn’t care, if she really wasn’t appreciative, she wouldn’t be upset. It’s the fact that she does care about their feelings (NOT the kids’ feelings) that makes this complicated.
Hopefully next year they’ll buy gifts then if they place importance on boxes under the tree.
No she did not.
She got a gift. Maybe next year she will get some perspective.
People get really sanctimonious when it comes to gifts. That’s how, when I was a kid and I was given a pink corduroy outfit that I absolutely hated for Christmas, I ended up breaking down in big bawling sobs. Because I hated it, and here I was being forced to parade around in it, feeling humiliated and made to feel as though I was an awful little child because my internal feelings didn’t match up with what everyone else expected. *Because all gifts are amazing and everyone should be grateful all the time that they got anything at all, dammit!!
*
So screw that. Not all gifts are created equal. In many cases I would rather have no gift whatsoever than have to deal with people telling me indirectly that I should be so thrilled and thankful someone got me a completely thoughtless gift, because all gifts are sacred or something.
Anyway, what I’m saying is there are a lot of people in this thread really pushing the line when it comes to judging someone else for how they react to a gift.
Probably wish you got a Kohl’s gift card instead 
I went back to your OP just to make sure I was reading everything correctly. I’m glad this was a scenario where she had a moment of upset, and then moved on. I still think, from the way you described it in the OP, that her “moment of emoting” was significantly bigger, deeper, and more unusual than the situation called for. But okay, we all have our things, sure. We don’t all have the same emotional stability in every single situation. There are probably a lot of emotional things that your wife would handle awesomely and I would overreact to.
But the thing that I’m wondering about, still, is what your wife (or you, since you’re the one on the message board) thinks “the problem” is.
The problem with the gift card not particularly fitting in with the things your family wants/needs for the holidays has certainly been solved, with a good solution.
But does your wife still think the problem is that your parents are bad/thoughtless gift-givers?
This sounds like a happy ending to me. 
On the “crying over a gift, WTFFFFF???” thing, I sympathize with the mom, for all the reasons Manda JO, Apidastra, buddha-david, and others have explained.
Personal anecdote to illustrate:
Every Christmas and birthday, from youth until adulthood, my mom would give me clothes. She and I had very different tastes, and invariably, she would give me something I didn’t like and would never wear. (Or looked awful on me because she had no sense of my size or shape, or was completely impractical like a coat that was nearly identical to one I already had.)
At some point when I was still a child, I began to politely request that she not get me clothes this time, but maybe something else like [XYZ] instead. She would say okay, and then she would just give me clothes. She would always say as she handed me the presents, “Now, I know you said not to give you clothes, but I saw this and just had to get it for you…” and her face would be all lit up with excitement, and my heart would sink with dread, and sure enough, the clothes would be terrible. And her face would fall and she’d be terribly hurt by my reaction, and then I’d feel terribly bad for hurting her.
I must have told her 100 times not to get me clothes, and she never listened to me. By the time I was in my teens, I had gotten to the point where I would feel like crying when she got me clothes. Then I got to the point where I did cry (in private). And then I’d feel like the world’s worst daughter for being so ungrateful over a gift that I’d actually cry(!!!) about it, and I’d feel even worse.
And the thing is…when I cried, it had nothing to do with the clothes! It had everything to do with her not listening to me, her not respecting my wishes, and her routinely putting me in the position where I inevitably hurt her feelings and subsequently felt like shit for being such an awful person. I was crying because I was frustrated and angry with her for persisting to do this to me instead of actually listening to me for once and taking my wishes and feelings into consideration.
That was the issue at heart – all my life, she had done things to me without taking me into consideration. This was just one of the many things. That’s why I cried over getting a silly sweater.
Reread the OP:
The underlined part is a directive. It’s no more a gift for her than my annual budget for teaching supplies is a gift for me.
And the mom perhaps was taking it as a “do it in time for Christmas” directive.