Can he convert the gift into store credit?
No.
Is there an official policy on this?
http://www.apple.com/legal/itunes/us/terms.html#APPS
"Gifts are not refundable"
If the money is just lost, who can I send a message to in order to voice my concerns?
You can comment to Apple through the
iTunes feedback page.
Buying a gift for anyone always carries the risk that they already have it. Not even all stores selling physical goods allow exchanges and returns, and electronic goods almost never are returnable. So if you're thinking of giving an electronic gift, you really need to be confident that they recipient doesn't already have it, or just accept the risk that they will and that your money will be lost. Note that if the gift was in the form of a redemption code not linked specifically to that person's email address, the recipient could pass the gift on to someone else.
Regards.
Message was edited by: Dave Sawyer