I cut contact from my mother a couple years ago. I know for a fact that my in-laws are still on friendly terms with her. It makes me extremely angry and has clouded my relationship with them, but at least they have never attempted to get me to mend my relationship with her, nor has my husband. I think that you need to explain to him that the relationship you had with her is toxic and you feel better not having her in your life. He should be able to abide by your wishes and to pass on to his parents that the subject is off limits. If he won’t, perhaps it’s time to ask him why he does not respect the decision you’ve made in your own self interest. I know it’s a hard decision to make, it takes a very strong person to make that break.
As far as the gifts go, if you are really and truly no contact and you don’t plan to be in the foreseeable future, I would send them back. I would not send a thank you card from her or yourself. This is contact and lets her foot in the door. Unless you are attempting to reconcile with her, I wouldn’t accept the gifts, even for your child.