"Let her know that you have NO intention of sending her a gift. "
Yes, but obliquely.
"You can send our gift to 123 Main St." "Thanks for letting me know your new address. I might need it in the future."
"We are registered at Wal-Mart." "I'll pass the info on to anyone who asks, thanks."
"It's proper etiquette to send a gift, even if you don't attend the wedding." "Where ever did you get that idea? If that was true, people would send invitations to total strangers out of the phone book."
"I know you'll want to send a gift." "As a general observation, it might be good to remember that gifts are voluntary, not obligatory."
"Please note that we are asking our guest to give us cash or gift cards." "I'll keep that in mind."