I have kids that age, the younger being a girl, and they both love games, especially Spot It, Zingo, Blink, Scrambled States and Sequence for Kids. My daughter also loves play doh sets, stencils, rubber stamp sets, puzzles and arts and crafts of any kind. She got a gift box once of a bunch of different types of art supplies and loved it! Also in the past they have gotten passes to swimming centers and museums as gifts or gift certificates for movie theatres, bowling and play centers. Her other favorite past time is playing dress up so a dress up box with dresses, leotards, tutus and fairy wings were a hit with her. Good luck!
I wasn't sure from your question if you were planning on spending $50 per child or if that was the cost for the total for both kids. If the former, read on: What about a doll house. I get it that it is really stereotypical gift, but they could both play with it together instead of having to purchase two individual gifts they might enjoy sharing this with each other. The thing about some of these doll houses (not just this one featured below) is that you can purchase add on playsets for other holidays...so you could get a swingset or a car for Valentines day or Easter or whatever....and those sets are under $20.00
Also in the spirit of them playing together, you could get a cheap Karaoke (sp) machine. What child doesn't enjoy singing and putting on concerts for their grandparents. A bonus for them is that you can record these for them and play them back at their sweet 16 party.
May I suggest if a boy a few Hot Wheels and a small track. If a Girl a Ken and Barbie Doll. The oldies are the goodies. Do not try to guess with all this new stuff. Boys always like cars and girls like Dolls. May I also suggest to purchase items here on Amazon, I always been happy with my Purchase's . Be care full on what some people may say here.
I would go with barbie, disney princess, fairies, and dress up clothes. I have a 5 year old and they never get old. Books also like the bad kitty books or amelia bedelia books are a big hit for kids now. Doll houses as well. If you are doing $50 each I would get the 5 year old all the dress up clothes and shoes and maybe a doll. The three year old I would get a craft desk or a play kitchen.