I would eventually give this money back in 4-5 years, so it is not free money, or in real terms, a 'gift' . 

For the tip, they'll get a gift certificate, no strings attached.

It might be better to assign the note interests to heirs under the gift tax provisions until  the note is fully assigned.

I have seen a few articles on BP about gift giving at Christmas time.

Hopefully this Christmas present begins to buy you your future holiday gifts for many years to come.

They think I should still give her a gift card.

should I give them some discount in rent or give them gift card of some sort or should not do either?

Gift from friends or family2.

If you're going to combine it with traditional financing, remember that lenders don't want you borrowing your down payment, so you will need to still put down 20% or so of the purchase price IN CASH, with "seasoned" funds that have been borrowed or gifted in the past 6 mos. 

They just required the person making the gift to state that it was in fact a gift, not a loan, and did expect any repayment whatsoever.