Yes, iTunes gift cards can be used to buy books. You need to add the card to your iTunes account. Scratch off the silver on the back of the gift card. Open iBooks, scroll to the bottom and there will be an option for Redeem, click on it and then enter the code from the back of the iTunes gift card. You balance will be updated upon successfully redeeming the card, iBooks should then use the gift card balance for your book purchases.
This option has also confused me and am glad to hear from Sock Monster that it is allowed.
In iTunes Store on the Buy a Gift Card page, it's lays it out specifically and they do NOT mention iBooks in a long lineup of product categories.
"The iTunes Store makes is easy to give songs, albums, plylists, audiobooks, music video, TV shows, games, and movies. Or you can give iTune Gift Cards and Gift Certificates and let your frineds choose for themselves."
It's so specific with a long list, but leave out iBooks to read.
Could they have just said, "Buy anything in the iTunes Store with your Gift Card."
Now I can ask for this for xmas, because I want to buy some iBooks.
This is probably because you can gift all of those things, but you can't gift an iBook. You can spend a 'gift card' on anything, including iBooks, but you can't buy an iBook within the store and give it to someone like you can with every other app etc.
Really frustrating, as there is a book I'd love to get my wif for Christmas, but I can't get to a shop to buy a gift card before Christmas. Besides, a Gift Card doesn't really do the trick. She'll probably just buy a song with it or something, but there is a point to this book I want to get her.
Annoyingly Amazon will allow you to gift books in this way. Get your act together Apple, if you're reading this.
To use an iTune Gift Card to buy books...
Open iTunes on your computer and click on the iTunes Store.
You'll need to be signed in...
Click on the little House icon in the dark gray bar across the top. (or Shift+Command+H)
On the right side of the page under Quick Links click Redeem and enter your code.
Then it will show your credit balance in the dark gray bar across the top next to your account name to let you know how much you have to spend.
Then as you buy books, it'll deduct from the credit balanace.
There is a distinction between, iTunes Gift Card and Apple Gift Card.
Apple Gift Card: can be used to purchase Apple hardware and accessories at any Apple Retail Store, the Apple Online Store...
iTunes Gift Card: To give music, movies, TV shows, apps, books, or anything on the iTunes Store, the App Store, the iBooks Store or the Mac App Store, select an iTunes Gift Card
If you want to redeem a gift card onto your account then in the iBooks app go into the Featured store tab in the app, swipe upwards to get to the bottom of the Featured page and tap the Redeem button. You can also redeem gift cards onto your account via the bottom of the Music tab in the iTunes store app, Featured tab in the App Store app, or via your computer's iTunes : Redeem and use iTunes Gift Cards and content codes - Apple Support