As touchy a subject as it is, truth in love works best as a response.
Truth: I appreciate your generosity, but I don't have that much space to store fabric.
Truth: If you want me give me something other than a gift card, I like (x brand and size) rotary blades. (The giver will see quickly how expensive they are.)
Truth: Flannel produces a lot of lint, which can mess up the delicate machine parts. A repair could cost me $100 so that's why I avoid using flannel.
Truth: Thanks. I will look through this and keep what I can use and donate what I can't use .Is that okay with you? (I use this line because I may find 10% of someone's cast-offs to be something I like. But I won't keep ugly fabric. It burdens my soul! If it's not okay with them, why are they donating to you?)
Truth: I love gift cards. They're just about my favorite thing besides this new hobby of mine.
If truth doesn't work on friends, you have bigger problems. LOL