Does touch ID not work when redeeming gift cards from iTunes?

I thought the whole idea with touch id was not having to enter your long-*** passwords all the time?!? iTunes asked for my password when I try to redeem gift cards, instead of letting me use touch id.  Is this the way its supposed to work?

I was having this issue too, it was always asking for the passcode even though the setting was on for iTunes & App Store. To fix it I turned it off and then back on again, it asked for my password and then it worked.
Steps:
- Go to Settings -> General -> Touch ID & Passcode -> Touch ID
- Disable iTunes & App Store
- Re-enable iTunes & App Store
- Enter your passcode one last time
- It should work
Also as others mentioned, under General -> Restrictions -> Require Password might need to be set to 15 minutes.

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