For me it's indifferent from where the money comes from. It's a gift, not an obligation.The fact you spent some time to choose something you think I would like (instead of a gift voucher) is heaps more important.
My family give me a gift voucher most years for XMAS from loyalty points.
It does hurt as they put a lot of thought into everyone else's gifts but I get a Coles Myer card.
If they chose a magazine subscription I'd like with the points instead I'd be thrilled.