Unless there is more to the story it sounds like they made a mistake.
The gift cards are taxable income. They have to be added to your W-2, and the company has to withhold 7.65% social security and medicare tax (take an extra $15.30 from your regular wages). They don't have to withhold federal and state income tax (although they could) but you will be responsible for those taxes on your tax return.
If they grossed you up by $455, does that mean they withheld $34.81 in social security and medicare instead of $15.30? That's not correct. Nor is adjusting it back down to $200 with an after-tax adjustment (a before-tax adjustment would give the correct income tax but probably still the wrong social security tax.)
