This sounds like an aggravating situation! I don't know family A's precise financial situation, but they certainly sound like moochers.
I think that I would speak with Grandpa about this first. He seemed to know that it was likely that they would not buy a nice gift. If the family is truly needy, perhaps he would step in and get the gift.
I'm afraid that stopping the mooching, while still doing nice things for the children on holidays, will be very difficult. Family A is accustomed to getting away with this, and habits are hard to break. I suspect that they will just cry "poor" if Grandpa talks to them.
For Easter, perhaps the money for the eggs could be collected way ahead of time, so that the person who buys doesn't have to use their own cash or credit car. The money could be collected during Christmas, and there would be plenty of time to remind Family A.
I like Hopefull's idea of homemade cards and gifts. That sounds like the true spirit of Christmas. I have seen children make lovely and thoughtful gifts for each other.
Perhaps I'm cynical today, but for some reason i suspect that Family A still wouldn't bother to get a nice gift made for another child.