I discovered this last year and simply killed off the GC redemption function. I have been using Altered Cart's Cash Rewards module -- very easy to credit anyone for instant spend @ checkout -- yes, this requires some admin clicks to apply a GC, but because I pay commissions on my GCs to affiliates, GCs are now a "product" for my store, and we do not need to use the xcart GC function.
I hate to say, the X-Cart Gift certificate module was simply never tested in the real world, not designed or engineered well, and should not be used for production.
