You can use an iTunes gift card only for buying software, music, and other similar downloadable products.
When you want to get someone a gift card to buy an ipod with, give them an apple store gift card (https://amzn.to/2N2zdS1) or amazon gift card (https://amzn.to/2MXGJ05). That would be your best options.
An apple store gift card can be spend online or in the apple store for all apple products.
An amazon gift card works on whole amazon also for other non apple products. (You can buy almost anything with it.)