I would give them the gift, because a gift should be given without expectations of getting anything in return; you know you did something nice; that's what counts. you don't have to be nice to that person and give a gift in the future, but you shouldn't withhold it.
What if you had a gift for someone and when you saw them they told you they had this great idea of getting you something but had an issue and couldn't get it. Do you still give them your gift? If you do give them the gift do you feel okay you got nothing? Do you believe their story?