I was able to apply the gift cards last year without revert to an individual plan and was able to maintain all playlists. It required Spotify to intervene I believe but it worked. Unfortunately I did not keep the email instructions. Try another contact with customer service.
I don't really see this as an acceptable "workaround" ... you lose family playlists and make users toggle between personal accounts and family accounts ... that's just crazy. How about selling a Family plan gift card ... or maybe just repair your payment system so a gift card is a gift card and not a work-around card.
It's been at least 2 years since I initially had this problem. This tells me one of two things .... 1) You simply don't care what your customers think. 2) You don't have the funds to hire a development staff to fix your problems. Both of these are bad.