I experienced it last year around San Diego. Two different locations. It lets you scan the gift cards. Then when you did the finish and pay, it gave the "wait for attendant" hang and then the attendant comes and says they can't complete the transaction and have to destroy the gift cards. They also had signs posted that said no gift card sales at self checkout (which I ignored).

Safeway in California also has signs up that say "no gift card sales at self checkout" at certain stores (supposed to be all stores according to the division management), and the behavior is exactly the same way there too. You can scan them, then they hang up with a needs approval prompt. Though every time I've done it there, they have always just come over and cleared the approval and let the transaction proceed. Not all locations have the signs posted either.